FINANCIAL MARKET REVIEW FOR JUN 25, 2018 It’s a busy week ahead on the data front, though focus through the week will continue to be geo-political, with trade wars and the EU Summit to consider. For the Dollar, key stats through the week include June’s consumer confidence figures on Tuesday, May durable goods orders, pending home sales and trade figures on Wednesday, finalized 1st quarter GDP numbers on Thursday and May personal spending and core PCE price index figures on Friday. A jump in consumer confidence and inflation would certainly give the Dollar a boost, while there will continue to be plenty of attention given to the Oval Office as the risk of a trade war continues to rise. A number of FOMC members are also scheduled to speak, though influence may be muted so soon after the June FOMC. The Dollar Spot Index ended the week down 0.28% to $94.520. For the EUR, it’s a particularly busy week ahead, with key stats including Germany’s June IFO Business Climate Index on Monday, prelim inflation numbers out of Spain, Germany and Italy, along with retail sales and consumer climate numbers out of Germany and the ECB’s economic bulletin on Thursday. The week is rounded off with prelim inflation numbers out of France and the Eurozone, French consumer spending and Germany unemployment numbers on Friday. Stats out of Germany and the Eurozone’s inflation numbers will be key from a data perspective. Following slightly better private sector June PMI numbers last week, any uptick in inflation and positive domestic consumption figures could provide support for the EUR, though the threat of tariffs on EU car imports into the U.S will need to be considered. The EUR/USD ended the week up 0.35% to $1.1651. For the Pound, Tuesday’s BoE financial stability report and Friday’s finalized 1st quarter GDP numbers will be the key drivers from a data perspective. With the BoE’s chief economist having joined the ranks of dissent, any upward revision to GDP numbers and a hawkish view on inflation would see the Pound on the move, though the waters will be muddied with the EU Summit, with Brexit also in focus. BoE Governor Carney is also scheduled to speak on Wednesday, Carney more than capable of giving the Pound a nudge. The GBP/USD ended the week down 0.13% to $1.3261 last week. For the Loonie, following an unimpressive set of inflation and retail sales figures last Friday, stats are on the lighter, with April GDP and RMPI numbers on Friday and the BoC’s business outlook survey the only releases through the week. While there will be some direction for the Loonie upon release of the stats and survey, though it’s going to boil down to trade. The Loonie ended the week down 0.64% to C$1.3269. Out of Asia, it’s a relatively busy week ahead. For the Aussie Dollar, it’s a particularly quiet week ahead, with stats limited to May’s new home sales and private sector credit numbers on Friday. Of greater influence will be the private sector credit numbers, though the influence of trade war chatter on commodity prices will likely have a greater influence through the week. The AUD/USD ended the week down 0.03% to $0.7440. For the Japanese yen, key stats through the week include May retail sales figures on Thursday and June’s Tokyo core inflation, prelim May industrial production and job / applications ratio figures on Friday. Retail sales and inflation will be key, both of which are forecasted to be Yen positive, though market risk sentiment through the week will overshadow the stats, which are unlikely to materially influence the BoJ’s stance on monetary policy. For the Kiwi Dollar, it’s a big week for the Kiwi, with key stats including May trade and June business confidence figures on Wednesday, ahead of the RBNZ’s interest rate decision and release of the rate statement on Thursday. Focus will be on the rate statement, with concerns over the housing sector and slower growth in the 1st quarter factors to contribute to a more dovish statement. The Kiwi Dollar ended the week down 0.59% to $0.6908.
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