News of progress towards a COVID-19 vaccine delivered support early on. U.S economic data and the BoC are in focus later, however.
Earlier in the Day:
It was a relatively quiet start to the day on the economic calendar. The Aussie Dollar was back in action, with consumer confidence in focus.
Away from the economic calendar, riskier assets got a boost on news of progress towards a COVID-19 vaccine. The news ultimately muted any market reaction to the continued upward trend in new COVID-19 cases.
Looking at the latest coronavirus numbers
On Tuesday, the number of new coronavirus cases rose by 218,739 to 13,454,480. On Monday, the number of new cases had risen by 199,164. The daily increase was higher than Monday’s rise while lower than 222,176 new cases from the previous Tuesday.
Germany, Italy, and Spain reported 1,110 new cases on Tuesday, which was down from 2,700 new cases on Monday. On the previous Tuesday, 776 new cases had been reported.
From the U.S, the total number of cases rose by 65,594 to 3,545,077 on Tuesday. On Monday, the total number of cases had increased by 65,488. On Tuesday, 7th July, a total of 67,655 new cases had been reported.
For the Aussie Dollar
In July, the Westpac Sentiment index fell by 6.1% to 87.9. In June, the index had risen by 6.3% to 93.7. Concerns over new COVID-19 cases weighed on consumer sentiment in the month. The period of the survey had coincided with the lockdown announcement for Melbourne.
According to the latest Westpac Report,
Looking at the sub-components:
The economy, next 12-months sub-index fell by 14.0% to 66.4, with the time to buy a major household item falling by 2.1%.
Time to buy a dwelling rose by 4.1%, with the House Price Expectations Index increasing by 8.5%.
Family finances vs a year ago rose by 2.5% to 78.9, while family finances next 12 months fell by 6.7% to 98.3.
The economy next 5-years slid by 14.0%, while the Unemployment Expectations Index increased by 12.1% to 142.6.
The Aussie Dollar moved from $0.69874 to $0.69919 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.50% to $0.7010.
At the time of writing, the Japanese Yen was up by 0.01% to ¥107.23 against the U.S Dollar, with the Kiwi Dollar up by 0.46% to $0.6562.
The Day Ahead:
For the EUR
It’s a relatively busy day ahead on the economic calendar. Key stats are limited to Italy’s finalized inflation figures for June.
We don’t expect the stats to have any impact on the Euro. Market sentiment towards the economic outlook and COVID-19 will remain the key drivers on the day.
Early this morning, the news of progress towards a COVID-19 vaccine was positive for the EUR.
At the time of writing, the EUR was up by 0.11% to $1.1412.
For the Pound
It’s a relatively quiet day ahead on the economic calendar. Key stats include June inflation figures.
We’re not expecting the markets to pay too much attention to the numbers, however. That leaves the Pound in the hands of Brexit and market risk appetite.
At the time of writing, the Pound was up by 0.24% to $1.2583.
Across the Pond
It’s a relatively busy day ahead for the U.S Dollar. Key stats include NY Empire State’s manufacturing numbers for July and June industrial production figures.
We would expect both sets of numbers to garner plenty of interest.
Away from the economic calendar, updates on COVID-19 and chatter from Washington will remain in focus, however.
At the time of writing, the Dollar Spot Index was down by 0.15% to 96.119.
For the Loonie
It’s a quiet but important day ahead on the economic calendar. While there are no material stats due out to provide the Loonie with direction, the Bank of Canada is in action.
The BoC will likely take a cautious stance as the U.S grapples with a 2nd wave of the pandemic.
Last week’s employment change figures for June did at least give the BoC some breathing room. That should make the press conference the main event of the week.
At the time of writing, the Loonie was up by 0.18% to C$1.3591 against the U.S Dollar.