Sunday evening and early Monday morning, witnesses a raft of economic calendar data delivered from (and for), both the Japanese and the Australasian economies, which could impact on the value of yen, and the Australian and New Zealand dollars, early on in Monday’s trading session and right through to the New York session.
The various Tankan indices for Japan include the third quarter readings for various manufacturing and non-manufacturing sectors, including; the large and small manufacturer index, and their outlook readings. Japan will also reveal vehicle sales data, official reserves (assets) and the Nikkei manufacturing PMI. With Japan’s Prime Minister Abe having recently announced the dissolution of Japanese Parliament, after calling a snap election, and Japan’s economy showing recent signs of improvement, this latest data series will be carefully analyzed by investors, should the data disappoint then yen could come under pressure, versus its main peers.
GDP annualized is currently running at 2.5% in Japan, inflation is at 0.7%, unemployment is the lowest in the G7 at 2.7%. Household debt to GDP is low, at circa 58% and savings rates are extremely high, at approx. 21% of income, despite the key interest rate being negative. However, government debt v GDP is running at 250% and the Abenomics policy; a successive attack versus low inflation and growth, using both fiscal and monetary policies, in order to ignite the benign Japanese economy, has failed in some respects.
The private firm AiG publishes an Australian manufacturing index, whilst the CBA publishes a manufacturing PMI for Aus. on Sunday evening/Monday morning, this is followed by TD Securities publishing an inflation reading for the country. New Zealand’s latest dairy auction and prices data is published and with milk powder being such a huge export phenomena for N.Z. to in particular China, this reading is always monitored carefully for signs of weakness; if N.Z.’s dairy exports fail, so does its economic performance and therefore the Kiwi (New Zealand’s dollar) will come under scrutiny.
As European markets open on Monday morning European time, the focus turns to the Swiss retail data, both MoM and YoY, a Swiss PMI and several other PMI readings that will be published for the leading European countries and the Eurozone as an entity. Perhaps the most anticipated PMIs will be the UK’s manufacturing PMI; expected to slip to 56.2 for September, from 56.9 in August, naturally any potential signs of weakness, relating to a Brexit induced lack of investment and confidence in manufacturing and ergo exports, will be looked for. The Eurozone unemployment rate is forecast to fall, to 9% from 9.1%.
As attention shifts to the New York open and North American data, Canada’s PMI for manufacturing is released from Markit Economics, August’s reading was 54.6, the maintenance of this figure will be expected, if not then investors will doubt the plausibility and timing of Canada’s central bank raising the key interest rate in late August, as a consequence the Canadian dollar may fall.
The ISM readings are arguably more accepted and respected by American based investors than the similar Markit PMI data. On Monday there’s two high impact ISM readings for the USA economy released; the manufacturing ISM reading is forecast to come in at 58 for September from 58.8 in August, whilst the September employment ISM reading is expected to maintain August’s reading of 59.9. Construction spending for August is expected to have recovered to 0.4% growth, from the shock, but seasonal, -0.6% figure recorded in July.
