Forex Market Recap (12-17 September 2021)

This week’s risk sentiment vibes looks to be one of risk-off, likely influenced by the never-ending pandemic uncertainty, as well as bearish economic updates & news from China. The USD and JPY out performed the rest of the majors, typical results in a risk-off environment. The USD also benefitted greatly from the positive US retail sales data update, launching it higher on Thursday.

USD:

• August budget deficit falls as revenues recover
• House Democrats propose new tax hikes to pay for their $3.5T bill
• Inflation coming off the boil as prices increase slowly in August
• Jobless claims: Another 332,000 individuals filed new claims last week
• Online purchases boost retail sales; labour market recovering
• Philly Fed factory index falls in July to lowest since December
• Long-end Treasury yields post the biggest drop in a month as traders recalibrate expectations for Fed’s next hiking cycle

EUR:

• The number of employed Italians increased by 338K (+1.5%) q/q in Q3
• German Wholesale prices in August 2021: +12.3% vs August 2020
• French central bank raises growth outlook as economy booms
• Euro area job vacancy rate at 2.3%; EU rate at 2.2%
• Industrial production up by 1.5% in the euro area & by 1.4% in the EU
• Annual inflation up to 3.0% in the euro area; Up to 3.2% in the EU
• Production in construction up by 0.1% in the euro area and down by 0.1% in the EU

GBP:

• Employee numbers surge above pre-pandemic levels
• Britain delays Brexit border checks as food industry warns of permanent shortages
• Headline CPI jumped from 2.0% to 3.0% vs. 2.9% forecast
• House prices fall as property market cools
• Retail sales slumped 0.9% in August vs. projected 0.5% rebound
• Consumer inflation expectations up from 2.4% to 2.7%

CAD:

• Trudeau slammed over rising inflation as election race tightens
• Annual CPI rises 4.1% in August, highest level since 2003
• Housing starts trended lower in August
• Trudeau holds a slight election edge, with help from his opponents

JPY:

• Wholesale inflation on the rise on higher yen-based imports
• BSI manufacturing index rebounded from -1.4 to +7.0
• BOJ’s Kuroda: Japan inflation to reach 2% goal, but not before 2023
• Japan exports slow as supply chain hiccups hit factories

AUD:

• House prices post record quarterly rise
• RBA Lowe says Australia won’t see any interest rate hikes for years thanks to the Delta outbreak
• Westpac consumer sentiment rebounded 2.0% in Sept
• Inflation and wage expectations higher in September
• Employment slides in August as lockdowns slash workers’ hours

NZD:

• Food prices rise for the fifth consecutive month as tomato growers ‘try to survive’
• Economy surges in Q2, supporting rate hike call
• Manufacturing index down from 62.2 to 40.1 in August