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Earlier in the Day:

Economic data released through the Asian session this morning was on the heavier side. With key stats released including November’s Business PMI out of New Zealand. 4th quarter Tankan numbers out of Japan ahead of finalized October industrial production numbers due out later in the morning. Out of China, November’s fixed asset investment, industrial production and retail sales figures were also released.

For the Kiwi Dollar,

The NZ Business PMI eased by 0.2 points to 53.5 in November. And holding above the long-term average of 53.4.

  • Production expanded at a slower pace in November, with the sub-index falling from 52.9 to 51.5.
  • Employment sub-index fell from 52.4 to 51.3, with new orders also on decline, falling from 57 to 56.3.

While the numbers were negative relative to October’s figures. They were still well ahead of levels hit through the 3rd quarter. The production having contracted in both July and September. with employment having contracted in August.

  • On the rise were finished stocks, which increased from 53.1 to 54.2 and deliveries that rose from 50.8 to 52.5.

Kiwi Dollar moved from $0.68587 to $0.68579 upon release of the figures. Before easing to $0.6797 at the time of writing, down 0.89% for the session.

For the Japanese Yen, the morning’s 4th quarter Tankan survey numbers provided some sense of what lies ahead:
  • All Big Industry CAPEX rose by 14.3% for the 4th quarter. Coming in ahead of a forecasted 12.7% and 3rd quarter 13.4%.
  • Tankan Big Manufacturing Outlook index eased back from a 3rd quarter 19 to 15, falling beyond a forecasted 16.
  • The Tankan Large Manufacturers Index held steady at 19, coming in ahead of a forecasted 17 in the 4th
  • The Tankan Large Non-Manufacturers Index rose from 22 to 24 in the 4thquarter, which was better than a forecasted 21.

From the numbers, Companies held onto their CAPEX plans for the FY2018 according to forecasts. With manufacturing firms forecasting a 15.6% rise in CAPEX, down 1.6% from the previous quarter. While non-manufacturers revised up forecasts by 2.3% to 13.5%.

While business conditions for large manufacturers remained unchanged. The more pessimistic outlook among big manufacturers will be a concern for the BoJ, with the ongoing U.S – China trade war. And a weaker global economic outlook weighing on business optimism.

The Japanese Yen moved from ¥113.581 to ¥113.587 against the U.S Dollar upon release of the figures. Before rising to ¥113.45 at the time of writing, a gain of 0.16% for the session.

Out of China,

  • Fixed Asset Investment rose by 5.9% year-on-year in November. Coming in ahead of October’s 5.7% rise, whilst in line with forecasts.
  • Industrial production rise by 5.4% year-on-year in November. Which was well below a forecasted and October. 5.9% increase.
  • Retail sales rose by 8.1%, falling short of a forecasted 8.8% and an October 8.6% increase year-on-year.

The Aussie Dollar moved from $0.71957 to $0.71837 upon release of the figures before easing to $0.7183 at the time of writing. A loss of 0.61% for the session. With risk aversion and more evidence of the negative effects of the ongoing U.S – China trade war weighing on the Aussie and Kiwi, while supporting the Yen.

The Day Ahead:

For the EUR,

Economic data scheduled for release out of the Eurozone is on the heavier side. With key stats including finalized November inflation numbers out of Spain and Italy. Eurozone wage growth figures for the 3rd quarter and prelim December private sector PMI numbers out of France. Germany and the Eurozone.

We will expect the EUR to be sensitive to the wage growth. German manufacturing and Eurozone composite, though there will be some relief following a lowering of tariffs on EU car imports into China.

Outside the numbers, geo-political risk will be an ever present influence, with the U.S President yet to truly threaten tariffs on EU cars, the latest move by China giving the U.S president food for thought.

At the time of writing, the EUR was down 0.03% to $1.1356, with today’s stats the key driver today.

For the Pound,

it’s a quiet day on the data front, leaving the markets to consider the events overnight in Brussels. And what lies ahead for Theresa May and the Brexit deal. The parliamentary vote now expected to take place in mid-January.

At the time of writing, the Pound down 0.13% to $1.2626, with Brexit chatter the key driver today.

Across the Pond,

it’s a busier day ahead on the data front. With key stats scheduled for release including November retail sales and industrial production numbers. Prelim December private sector PMI numbers and October’s business inventory numbers.

We will expect the Dollar to respond to the stats. As the markets look to gauge the direction of the economy ahead of next week’s FED meeting and release of the FOMC economic projections for next year.

Outside of the stats, we can expect chatter from the Oval Office to continue to play a hand. Trade talks and the wall and a possible government shut down there for consideration through the day.

At the time of writing, the Dollar Spot Index was up 0.08% to 97.137.

For the Loonie,

it’s yet another quiet week on the data front, leaving the Loonie to respond to economic indicators out of China, Europe and the U.S, any weak figures likely to be a negative for crude oil prices and the Loonie through the day.

The Loonie was down 0.12% to C$1.3371 against the U.S Dollar at the time of writing.

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