The Weekly Wrap – Positive Economic Data, the ECB, and the U.S Relief Package Were in Focus


The Stats

It was a quieter week on the economic calendar, in the week ending 12th March.

A total of 45 stats were monitored, following 70 stats from the week prior.

Of the 45 stats, 24 came in ahead forecasts, with 17 economic indicators coming up short of forecasts. There were 4 stats that were in line with forecasts in the week.

Looking at the numbers, 23 of the stats reflected an upward trend from previous figures. Of the remaining 22 stats, 18 reflected a deterioration from previous.

For the Greenback, it was back into the red, following 2 consecutive weekly gains. In the week ending 12th March, the Dollar Spot Index fell by 0.33% to 91.679. In the previous week, the Dollar had rallied by 1.17% to 91.940.

Out of the U.S

It was a quieter week on the economic data front.

Key stats included inflation, jobless claims, and consumer sentiment figures.

The stats were skewed to the positive.

While inflationary pressures softened in February, initial jobless claims fell back from 754k to 712k in the week ending 5th February.

The annual rate of core inflation eased from 1.4% to 1.3% in February.

JOLTs job openings were also positive for January, with openings rising from 6.752m to 6.917m.

At the end of the week, the Michigan Consumer Sentiment Index rose from 76.8 to 83.0.

In the equity markets, the Dow rallied by 4.07, with the S&P500 and the NASDAQ rising by 3.09% and by 2.64% respectively.

The passing of the $ 1.9 trillion through the House coupled with positive stats supported the markets.

Out of the UK

It was another relatively quiet week on the economic data front.

In the 1st half of the week, stats included retail sales figures for February.

A 9.5% increase in retail sales, year-on-year, according to the BRC, provided Pound support.

At the end of the week, GDP and manufacturing and industrial production figures drew interest.

Manufacturing production and industrial production fell by 2.3% and by 1.5% respectively in January. Production had seen minor increases in December.

The UK economy also contracted in January, after having returned to growth in December.

Month-on-month, the economy contracted by 2.9%, reversing growth of 1.2% from December. Year-on-year, the economy contracted by 9.2% after having contracted by 8.6% in December.

Trade data was Pound positive, with the trade deficit narrowing.

In January, the UK trade deficit narrowed from £14.32bn to £9.83bn.

The Non-EU trade deficit narrowed from £5.2bn to £1.76bn

In the week, the Pound rose by 0.60% to end the week at $ 1.3924. In the week prior, the Pound had fallen by 0.68% to $ 1.3838.

The FTSE100 ended the week up by 1.97%, following a 2.27% gain from the previous week.

Out of the Eurozone

It was a relatively busy week on the economic data front, with the German and Eurozone economies in focus.

Early in the week, German industrial production and trade data were in focus.

Industrial production slid by 2.5% in January, while Germany’s trade surplus widened from €16.4bn to €22.2bn.

Following impressive manufacturing PMIs from Germany early in the year, the markets were able to brush aside the weak production numbers.

For the Eurozone, 4th quarter GDP numbers also had a muted impact on the majors on Tuesday.

At the end of the week, Eurozone industrial production figures beat forecasts, with production rising by 0.8%. In December, production had fallen by a revised 0.1%.

Other stats in the week included French nonfarm payrolls and finalized inflation figures for Germany and Spain. These had a muted impact on the majors, however.

On the monetary policy front, the ECB monetary policy decision was the main event of the week. In line with market expectations, the ECB left policy unchanged.

Supporting the European majors, however, the ECB vowed to ramp up bond purchases in response to rising borrowing costs.

For the week, the EUR rose by 0.32% to $ 1.1953. In the week prior, the EUR had fallen by 1.32% to $ 1.1916.

For the European major indexes, it was bullish week. The CAC40 and DAX30 rallied by 4.56% and by 4.18% respectively. The EuroStoxx600 ended the week with a more modest 3.56% gain.

For the Loonie

It was a relatively quiet week.

On the economic data front, the markets needed to wait until Friday for the numbers.

Employment jumped by 259.2k in February, reversing a 212.8k slide in January. As a result, the unemployment rate fell from 9.4% to 8.2%.

Wholesale sales figures for January were also out on Friday but had a muted impact on the Loonie.

On the monetary policy front, the Bank of Canada was in action on Wednesday. In line with market expectations, the BoC left rates unchanged. The Rate Statement suggested a hold on policy until 2023, however.

While the statement was dovish, economic data from China and a pickup in crude oil prices delivered for the Loonie.

In the week ending 12th March, the Loonie rallied by 1.45% to C$ 1.2475. In the week prior, the Loonie had fallen by 0.60% to C$ 1.2650.


It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 12th March, the Aussie Dollar rose by 1.01% to $ 0.7764, with the Kiwi Dollar ending the week up by 0.13% to $ 0.7176.

For the Aussie Dollar

It was a quiet week.

Business and consumer confidence figures were in focus in the week, with the stats delivering Aussie Dollar support.

The NAB Business Confidence Index rose from 10.0 to 16.0, with the Westpac Consumer Sentiment Index increasing by 2.6%.

With both business investment and consumer spending key to a sustained economic recovery, the numbers will have provided some comfort to the RBA.

For the Kiwi Dollar

It was also a quiet week.

Electronic card retail sales and business PMI figures for February were in focus.

The stats were skewed to the negative.

Card retail sales fell by 2.5% in February, following a 0.3% decline in January.

The Business PMI fell from 57.5 to 53.4 in February, after having bounced back from a December 48.7.

Lockdown measures reintroduced in mid-Feb were a contributory factor, easing the impact on the Kiwi.

For the Japanese Yen

It was another relatively busy week.

Household spending and 2nd estimate GDP figures for the 4th quarter were in focus.

In January, household spending slid by 7.3%, reversing a 0.9% increase from December.

Year-on-year, spending was down 6.1%. In December, spending had been down by a modest 0.6%.

2nd estimate GDP numbers also disappointed. In the 4th quarter, the economy expanded by 2.8%, down from a 1st estimate 3.0%. Year-on-year, the economy expanded by 11.7%. This was down from a 1st estimate 12.7%.

The Japanese Yen slipped by 0.66% to ¥109.03 against the U.S Dollar. In the week prior, the Yen had fallen by 1.69% to ¥108.37.

Out of China

It was a quieter week on the data front, with inflation figures for February in focus.

The stats were skewed to the positive, with deflationary pressures softening.

In February, the consumer prices fell by 0.2%, year-on-year, after having fallen by 0.3% in January.

Wholesale inflationary pressures picked up, however, accelerating from 0.3% to 1.7%.

From the previous Sunday, trade data set the tone going into the week, with exports surging by 60.6% in February. Imports jumped by 22.2% pointing to sustained demand to support riskier assets.

In the week ending 5th March, the Chinese Yuan fell by 0.18% to CNY6.5084. In the week prior, the Yuan had fallen by 0.36% to CNY6.4970.

The CSI300 fell by 2.21%, with the Hang Seng ending the week down by 1.23%.

This article was originally posted on FX Empire