Forex Market Recap (01-06 August 2021)

We have a heavy week of central bank highlights, including the RBA's insistence to continue tapering, expectations of a rate hike in New Zealand, and comments from the Fed on when we may see tapering in the US.

USD:

• PMI ticks up to a record high at 63.4
• ISM manufacturing at 59.5, growth is slowing
• Fed’s Waller says to ‘Go early and go fast’ on tapering
• Private companies added 330,000 jobs in July, according to ADP, far short of the 653,000 estimate
• Fed Vice Chair Clarida anticipates rate hikes starting in 2023, sees upside risks to inflation
• Fed’s Daly sees bond program taper later this year or early 2022
• Payrolls increase 943,000 in July as the unemployment rate reaches 5.4%

EUR:

• Eurozone Manufacturing growth remained strong in July despite a slight loss of momentum
• Industrial producer prices up by 1.4% m/m
• Spanish unemployment decreased by -5.47% in July
• Eurozone PMI grows at the fastest rate since June 2006
• Growth of eurozone productivity hits ten-month high amid stronger expansion in the service sector
• In Q2 2021, French payroll employment increased by 1.2% and returned to its end of 2019 level

GBP:

• Covid cases down by 33% over the past week
• Service PMI sector recovery slows again in July, while inflationary pressures hit a new record high
• BoE keeps policy unchanged, warns of ‘more pronounced’ period of inflation
• BoE to keep a very close eye on inflation’s impact on wages

CAD:

• Merchandise trade balance returned to a surplus position, reaching $3.2B in June
• Jobs recovery continues in July amid reopenings
• PMI for July falls to 56.4 vs. 71.9 previous

JPY:

• Manufacturing PMI upgraded from 52.2 to 53.0
• Tokyo shows an inflation pulse for the first time in a year
• Business activity falls at a quicker pace in July
• Japan warns of unprecedented covid spread as cases hit record in Olympic host city
• Tokyo logs record covid cases over 5,000 amid medical collapse fears

AUD:

• Inflation gauge ticked higher from 0.4% to 0.5%
• Manufacturing sector growth slows amid virus disruption and supply constraints
• AU consumer confidence rebounds 1.1% after lockdowns lift
• RBA will trim bond-buying even as Delta variant slams economy
• Retail sales fell by 1.8% as expected in June
• Service sector sinks into contraction amid virus wave

NZD:

• Quarterly employment change up 1.0% vs. 0.7% forecast in Q2
• Unemployment rate down from 4.6% to 4.0% vs. 4.4% forecast
• ANZ, Westpac, KiwiBank, ASB, BNZ project an RBNZ rate hike later this month