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Eurozone August industrial production +0.7% vs +0.8% m/m expected

  
Analysis, Economy

Latest data released by Eurostat – 14 October 2020

  • Prior +4.1%; revised to +5.0%
  • Industrial production -7.2% vs -7.0% y/y expected
  • Prior -7.7%; revised to -7.1%

Euro area factory output continues to highlight an improvement in Q3 but the recovery pace is losing some steam with the August bounce, though expected, not all too robust.

That said, manufacturing PMI data for September provided some indication that the industrial sector is still holding up towards the end of Q3 but amid ongoing virus concerns, it remains to be seen how things will progress as we move towards the year-end.

Japan August final industrial production +1.0% vs +1.7% m/m prelim

  
Analysis, Economy

Latest data released by METI – 14 October 2020

  • Industrial production -13.8% vs -13.3% y/y prelim
Slight delay in the release by the source. The preliminary release can be found here.
A slightly lower revision sees Japanese factory output improve at a slower pace than initially estimated in August. The recovery in Japan is still very much gradual but at least it is still keeping pace somewhat in Q3 so that should offer some comfort to the BOJ.
But overall conditions are still seen far off compared to pre-virus levels, so there’s that.

China trade balance for January to September 2.3T

  
Analysis, Economy

China trade balance for September 2020

  • Trade balance for January to September 2 .3 trillion surplus.
  • Imports -0.6% year on year Yuan terms
  • exports rise 1.8% year on year yuan terms
  • soybean imports rise 15.5%
  • coal imports fall -4.4% YoY
  • iron or imports rise 10.8% YoY to 868M
  • crude oil imports rise of 12.7% YoY to 416M
  • trade with the United States +2% from January to September
China customs says international landscape becomes increasingly grim and complicated. They add that instability and uncertainties are on the rise

BOJ’s Kuroda: Japan economy remains in a severe situation but starting to pick up

  
Analysis, Economy

Comments from the BOJ Governor:

  • Will watch impact of COVID-19 and take additional easing steps if needed without hesitation
  • Japan consumer prices likely to fall for the time being
  • Consumer prices likely to turn positive thereafter, gradually accelerate pace of increase as economy improves
This is a generally upbeat take but in like with what we’ve heard before.

BOJ Gov Kuroda says full global economic recovery is further down the road

  
Analysis, Economy

Speech by Governor Kuroda at the 62nd Annual Meeting of the National Association for Business Economics

Topic is:
  • COVID-19 and the Global Economy: Impact and Challenges
Headlines via Reuters:
  • full-fledged recovery of global economy seems much further down the road
  • downturn of the asian economy has been moderate in comparison with other regions
  • asian financial markets have been able to weather impact of covid-19 due to build-up of foreign currency reserves, swift and aggressive implementation of fiscal and monetary measures
  • supply chains in asia have been disrupted due to strict public health measures
  • domestic demand has been weak in many asian economies, reflecting deterioration in employment and income conditions
  • recent pandemic has exposed certain vulnerabilities in asian supply chain networks
  • business reforms triggered by covid-19 are expected to boost productivity in asia in longer term
  • key for asia to achieving sustainable growth is to work toward realising inclusive, green and digital economy
  • covid-19 pandemic has highlighted importance of regional, international cooperation in implementing appropriate measures vs economic shocks
  • fundamental importance of globalization to global economy will not change

France’s 4th quarter economic growth forecast downgraded to 0% from 1%

  
Analysis, Economy

INSEE: sees consumer spending falling and fourth-quarter

INSEE is out with forecast for fourth-quarter economic growth in France. They now see economic growth downgraded to 0% from 1% as consumer spending falls.
INSEE, is the national statistics bureau of France. It collects and publishes information about the French economy and people and carries out the periodic national census.
The EURUSD has rotated back to the downside and trades negative on the day. Looking at the 4 hour chart, the price is moving away from the 200 bar moving average on the 4 hour chart at 1.1797. Support target comes between 1.1764 and 1.1771.
EURUSD on the 4 hour chart

Eurozone September final services PMI 48.0 vs 47.6 prelim

  
Analysis, Economy

Latest data released by Markit – 5 October 2020

  • Composite PMI 50.4 vs 50.1 prelim
The preliminary report can be found here. The slight revision higher was predicated by the better revision to the German report earlier, but the contraction in the services sector highlights the two-paced recovery faced by most countries in the Eurozone.
Overall economic activity is seen grinding towards a halt and if virus developments continue to take a turn for the worse, could threaten the economic recovery in the region towards the closing stages of the year. Markit notes that:
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