The Japanese Yen
Household spending slid by 2% in February, month-on-month, reversing a 0.7% rise in January. Year-on-year, spending rose by 1.7%, coming up short of a forecasted 1.9% increase.
According to figures released by the Ministry of Internal Affairs and Communications,
Weighing on overall household spending, year-on-year, were
- A 6.4% fall in spending on fuel, light & water charges and a 4.9% fall in spending on education. There was also a 1.9% fall in spending on other consumption expenditures.
Supporting household spending:
- Spending on transportation and communication rose by 6.7%, with spending on furniture and household utensils up 5.8%.
- There were also notable increases in spending on housing (4.7%), clothing & footwear (3%), and culture & recreation (2.9%).
One factor that weighed on overall household spending, year-on-year, was a 0.8% fall in disposable incomes.
It’s another relatively quiet day on the economic calendar. Germany’s February industrial production figures are due out ahead of the European open.
Following a 4th consecutive fall in factory orders in February and the continued contraction in Germany’s manufacturing sector, anything positive would be a surprise.
In the wake of the ECB monetary policy meeting minutes from Thursday, dire numbers could raise the prospects of a near-term move by the ECB.
While we can expect the EUR to respond to the numbers, sentiment towards the U.S – China trade talks and Brexit will also be a factor.
Later in the day, nonfarm payroll and wage growth figures due out of the U.S will also influence market risk appetite.
Economic data due out of the UK is limited to March house price figures that will have a muted impact on the Pound.
Following Wednesday’s parliamentary vote in support of the Cooper Bill, the focus has turned to the House of Lords. With the debate over the draft legislation having kicked off on Thursday, a vote could be imminent and there could be a surprise.
It’s highly unlikely that the draft legislation will get passed without changes, which will then see MPs grapple to push through a bill that previously had passed by just one vote.
Chatter from the EU will also need to be monitored. Through Thursday, there wasn’t overwhelming support for a lengthy extension unless there was a justifiable reason to do so. A 2nd Referendum would certainly be something that EU member states would support.
It’s a big day for the Greenback. Nonfarm payroll and wage growth figures will be the key driver later today. Following February’s particularly dire NFP numbers, the markets will be looking for a bounce back. Recent weekly jobless claims figures support a rebound, though will it be enough. The markets will need to see 185K plus to really be convinced…
Wage growth will likely have less of an influence this time around, following the FED’s decision to hit pause on rate hikes.
Outside of the numbers, market risk sentiment will provide direction for the Dollar ahead of the numbers.
Canada’s labor market figures are due out later in the day. We can expect the Loonie to be particularly sensitive to the stats. While forecasts are for the unemployment rate to hold steady at 5.8%, it will be the employment change numbers that count…
Outside of the stats, expect market risk appetite to overshadow the stats later in the day.