The Weekly Wrap – Russia and Ukraine eclipse economic data


Statistics

It’s been a busy week on the economic calendar in the week ending 18and February.

A total of 66 stats were monitored, following 31 stats the previous week.

Of the 66 statistics, 33 are ahead of forecasts, with 26 economic indicators below forecasts. There were 7 stats that were in line with the forecast for the week.

Looking at the numbers, 32 of the stats reflected an upward trend from previous numbers. Of the remaining 34 stats, 28 reflected a deterioration from previous ones.

While statistics sparked interest, geopolitical risk was the main driver for the week. The threat of a Russian invasion of Ukraine boosted safe-haven demand during the week.

Outside the United States

Wholesale price inflation and retail sales figures received a lot of attention in the 1st half the week. The numbers were positive, supporting the Fed’s stance on monetary policy.

Despite rising consumer prices, retail sales jumped 3.8% in January, reversing a 2.5% decline from December. Inflationary pressures in wholesale markets also increased, with the producer price index increasing by 1.0% in January. The index rose by a more modest 0.4% in December.

In the 2n/a half of the week, unemployment insurance claims were essential. In the week ending 11and In January, initial jobless claims rose from 225,000 to 248,000. The numbers weren’t low enough to derail the Fed’s rate hike plans.

On the monetary policy front, the minutes of the FOMC meeting were also key. The minutes revealed that members were willing to consider meeting-by-meeting rate increases instead of recording rate increases until the first half of the year. Minutes were seen as more dovish than expected, providing some support for riskier assets.

In the week ending 18and In February, the Dollar Spot Index rose 0.02% to end the week at 96.106. The previous week, the index rose 0.63% to 96.082.

Outside the UK

It was an important week on the economic data front. The number of claimants, inflation and retail sales were key statistics to set the BoE’s monetary policy in the short term.

The statistics were positive for the British pound. The number of claimants fell by 31,900, leaving the unemployment rate stable at 4.1%. The UK’s annual inflation rate fell from 5.4% to 5.5% in January.

At the end of the week, retail sales also sent bullish signals for the pound. Month over month, core retail sales rose 1.7% as retail sales rose 1.9%. The recovery in consumption occurred despite a continued rise in consumer prices in the new year.

During the week, the Grind rose 0.18% to end the week at $1.3589. The previous week, the pound was up 0.24% at $1.3564.

The FTSE100 ended the week down 1.92%, reversing a 1.92% gain from the previous week.

Outside the euro area

The economic sentiment figures for Germany and the Eurozone and the Eurozone GDP figures were decisive at the start of the week.

It was a mixed set of numbers. While 4and GDP figures for the quarter were in line with 1st estimates for the euro zone, the economic sentiment figures disappointed. Germany’s ZEW economic sentiment index rose from 51.7 to 54.3, while that of the euro zone fell from 49.4 to 48.6.

Other statistics for the Eurozone were mixed, however, supporting the ECB’s view on the economy at the turn of the year.

Industrial production rose another 1.2% after rising 2.4% in November. The eurozone trade deficit widened, however, as supply chain constraints weighed. In December, the trade deficit in the euro zone widened from 1.5 to 4.6 billion euros.

For the week, the USD fell 0.25% to $1.1322. The previous week, the euro had fallen 0.86% to $1.1350.

The DAX slid 2.47%, with the CAC40 and EuroStoxx600 ending the week down 1.17% and 1.87% respectively.

For the loon

Inflation and retail sales were the main statistics of the week. The numbers were mixed, with consumer prices rising, while retail sales reversed.

In January, Canada’s annual core inflation rate accelerated from 4.0% to 4.3% as core consumer prices rose 0.8% during the month. Retail sales, however, fell 1.8% in December, with core retail sales down 2.5%.

In the week ending 18and February, the Loonie fell 0.12% to C$1.2752 against the greenback. During the previous week, the Loonie was up 0.16% to C$1.2737.

Elsewhere

It was a bullish week for the Australian dollar and the kiwi dollar.

The Australian dollar rose 0.56% to $0.7177, with the Kiwi dollar gaining 0.69% to end the week at $0.6697.

For the Australian dollar

The employment figures were the main concern at the end of the week. In January, the unemployment rate remained at 4.2%. While full employment fell by 17,000, employment rose by 12,900 during the month.

For the kiwi dollar

Wholesale inflation caught the eye on Friday. In the 4and quarter, the intermediate consumption producer price index increased by 1.1% quarter on quarter, after increasing by 1.6% in the previous quarter.

For the Japanese yen

Key statistics included 4and quarterly GDP, trade and inflation figures.

In the 4and quarter, the economy grew 1.3%, quarter over quarter, reversing a 0.9% contraction from the third. Year-on-year, the economy grew 5.4% after contracting 3.6% in the previous quarter.

Trade data disappointed, however, with exports registering a slight increase over imports. As a result, Japan’s trade deficit widened from 583.3 billion yen to 2,191.1 billion yen in January.

On the inflation front, Japan’s core annual inflation rate fell from 0.5% to 0.2% in January.

the japanese yen rose 0.14% to end the week at ¥115.420 against the US dollar. The previous week, the yen ended the week at ¥115,260.

Outside of China

Inflation was also a major concern. In January, China’s annual inflation rate fell from 1.5% to 0.9%. Wholesale inflationary pressures have also eased. China’s annual wholesale inflation rate was 9.1%, down from 10.3% in December.

In the week ending 18and In February, the Chinese yuan rose 0.46% to CNY 6.3256. The previous week, the yuan ended the week up 0.10% at CNY 6.3546.

The Hang Seng index ended the week down 2.32%, while the CSI300 gained 1.08%.

This item was originally published on FX Empire

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