GLOBAL FX STRATEGY | FX QUICK NOTES 120 40 …...US Apple Mobility Trends routing requests, 7 -dma...
Transcript of GLOBAL FX STRATEGY | FX QUICK NOTES 120 40 …...US Apple Mobility Trends routing requests, 7 -dma...
1
GLOBAL FX STRATEGY | FX QUICK NOTES Monday, June 25, 2020
High-Frequency Dashboard: Tracking the Post-Lockdown Recovery (June 25, 2020)
Shaun Osborne
Chief FX Strategist
461.945.4538
Follow us on Twitter @SCOTIABANKFX
Google Community Mobility
• Daily Google data tracking movement trends continues to point to a gradual recovery in economic activity. Germany and Japan are generally
taking the lead across all metrics, with activity in workplaces ‘only’ about 15% lower than their respective baselines (Jan 3-Feb 6)—though
showing signs of stalling recently—compared around 30% in Canada, the US, and Mexico, while the UK falls behind at ~45% lower as reopening
efforts in the country lag following the UK government’s slow response at the onset of the COVID-19 outbreak.
-80
-40
0
40
80
120
03/20 04/20 05/20 06/20
Retail & recreation Grocery & pharmacyParks Transit stationsWorkplaces Residential
Source: Google, Scotiabank FICC Strategy.
Canada Google Community Mobility % change from baseline, 7-dma
(Last: Jun 19)
-80
-40
0
40
80
120
03/20 04/20 05/20 06/20
Retail & recreation Grocery & pharmacyParks Transit stationsWorkplaces Residential
Source: Google, Scotiabank FICC Strategy.
US Google Community Mobility% change from baseline, 7-dma
(Last: Jun 19)
-80
-40
0
40
80
120
03/20 04/20 05/20 06/20
Retail & recreation Grocery & pharmacyParks Transit stationsWorkplaces Residential
Source: Google, Scotiabank FICC Strategy.
UK Google Community Mobility% change from baseline, 7-dma
(Last: Jun 19)
-80
-40
0
40
80
120
03/20 04/20 05/20 06/20
Retail & recreation Grocery & pharmacyParks Transit stationsWorkplaces Residential
Source: Google, Scotiabank FICC Strategy.
Germany Google Community Mobility% change from baseline, 7-dma
(Last: Jun 19)
-80
-40
0
40
80
120
03/20 04/20 05/20 06/20
Retail & recreation Grocery & pharmacyParks Transit stationsWorkplaces Residential
Source: Google, Scotiabank FICC Strategy.
Japan Google Community Mobility% change from baseline, 7-dma
(Last: Jun 19)
-80
-40
0
40
80
120
03/20 04/20 05/20 06/20
Retail & recreation Grocery & pharmacyParks Transit stationsWorkplaces Residential
Source: Google, Scotiabank FICC Strategy.
Mexico Google Community Mobility% change from baseline, 7-dma
(Last: Jun 19)
Juan Manuel Herrera
FX Strategist
416.866.6781
-80
-70
-60
-50
-40
-30
-20
-10
0
10
20
02/20 03/20 04/20 05/20 06/20
US GermanyUK JapanMexico Canada
Source: Google, Scotiabank FICC Strategy.
Google Community Mobility: Workplaces
% change from baseline, 7-dma
(Last: Jun 19) -90
-80
-70
-60
-50
-40
-30
-20
-10
0
10
20
02/20 03/20 04/20 05/20 06/20
US GermanyUK JapanMexico Canada
Source: Google, Scotiabank FICC Strategy.
Google Community Mobility: Retail
% change from baseline, 7-dma
(Last: Jun 19) -80
-70
-60
-50
-40
-30
-20
-10
0
10
20
02/20 03/20 04/20 05/20 06/20
US GermanyUK JapanMexico Canada
Source: Google, Scotiabank FICC Strategy.
Google Community Mobility: Transit Stns.
% change from baseline, 7-dma
(Last: Jun 19)
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GLOBAL FX STRATEGY | FX QUICK NOTES Monday, June 25, 2020
0
20
40
60
80
100
03/20 04/20 05/20 06/20
Source: Google, Scotiabank FICC Strategy.
Canada and US:Topic "Unemployment Benefits"
respective peak = 100(Last: Jun 22)
Canada7-day ma
US7-day ma
Cda "CERB"
7-day ma
Cda"CESB"
7-day ma
0
20
40
60
80
100
03/20 04/20 05/20 06/20
Source: Google, Scotiabank FICC Strategy.
Canada and US:Search Term "New Car"
respective peak = 100(Last: Jun 22)
Canada7-day ma
US7-day ma
0
20
40
60
80
100
03/20 04/20 05/20 06/20
Source: Google, Scotiabank FICC Strategy.
Canada and US:Search Term "Rent Relief"
respective peak = 100(Last: Jun 22)
Canada7-day ma
US7-day ma
20
40
60
80
100
03/20 04/20 05/20 06/20
Source: Google, Scotiabank FICC Strategy.
Canada and US:Search Term "Realtor"
respective peak = 100(Last: Jun 22)
Canada7-day ma
US7-day ma
Google Search Trends
• Daily Google Trends data shows a marked decline in search interest for unemployment benefits in Canada—where searches for the federal
government’s other income support programmes, CERB (now expanded by 8 weeks) and CESB, supplanted broad searches for employment
insurance—and the US—where searches remain nevertheless elevated and mirror the lack of an additional decline in the number of weekly initial
claims. “Bankruptcy” search interest has declined from its peak in May in Canada but has recently accelerated in the US, while searches for
“realtor” and “new car” have risen in both countries which suggests a rebound in demand for these on top of the seasonal increase in auto and
home purchases around this time of year. Increasing searches for “Covid test” may reflect increased willingness to get tested.
0
20
40
60
80
100
03/20 04/20 05/20 06/20
Source: Google, Scotiabank FICC Strategy.
Canada and US:Topic "Bankruptcy"
respective peak = 100(Last: Jun 22)
Canada7-day ma
US7-day ma
0
20
40
60
80
100
03/20 04/20 05/20 06/20
UK FraIta MexUS Cda
Source: Google, Scotiabank FICC Strategy.
Search Term "Covid Test"
respective peak = 100, 7-day ma (Last: Jun 22)
Indeed New Job Postings
• Online daily job postings on Indeed remain
depressed relative to 2019 as firms hold
back on hiring plans, with the trend in new
job postings in Canada down by around 24%
whereas in the US they are only down about
12%.
New York Fed Economic Index
• The NY Fed’s weekly economic index which
aggregates ten different daily and weekly
indices points to a year-on-year decline in
GDP of around –8.4% in early-June
equivalent to a 26.7% q/q annualised decline
for the full quarter—consensus sits at –35%.
-14
-12
-10
-8
-6
-4
-2
0
2
4
01/20 02/20 03/20 04/20 05/20 06/20
Source: FRBNY, Scotiabank FICC Strategy.
US FRBNY WeeklyEconomic Indexy/y % GDP grow th equivalent(Last: Jun 25)
-0.60
-0.40
-0.20
0.00
0.20
0.40
01/20 02/20 03/20 04/20 05/20 06/20
Source: FRBSF, Scotiabank FICC Strategy.
San Fran Fed US Daily News Sentiment Index
index(Last: Jun 21)
San Fran Fed News Index
• The FRB of San Francisco’s Daily News
Sentiment Index, which tracks the implied
tone of news articles in 16 major US
newspapers, points to only a minor
improvement in sentiment since its trough in
late-March, which may indirectly keep
consumer confidence subdued.
0
20
40
60
80
100
120
140
02/20 03/20 04/20 05/20 06/20
US (2019) US (2020)
Canada (2019) Canada (2020)
Source: Indeed, Scotiabank FICC Strategy.
Indeed New Job Postings
Feb 1 = 100, 7-dma (Last: Jun 19)
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GLOBAL FX STRATEGY | FX QUICK NOTES Monday, June 25, 2020
Scotiabank Canadian Merchant Data
• Scotiabank debit and credit card payments data compiled by our Economics, Customer Insights, and
Data & Analytics teams show that retail transactions across core merchant categories such as
entertainment, travel, and restaurants remain heavily depressed in Canada when compared to the
same period last year; note that the data may partly underestimate the decline in sales owing to
increased usage of cards instead of cash to avoid contagion. Total credit and debit transactions fell by
close to 30% y/y in April and now stand above their year-ago levels. While the lockdown measures,
travel bans, and fear of contagion have sharply hit the travel industry—with transaction volumes down
about 60% y/y as of a week ago—other sectors have seen an increase in sales as people spend more
time at home (e.g. computer software sales are up about 90% y/y). Clothing sales have also stopped
contracting year-on-year. For more details see here. For questions contact Nikita Perevalov
([email protected]) or Rene Lalonde ([email protected]).
-100
-80
-60
-40
-20
0
20
40
60
80
Jan-20 Feb-20 Mar-20 Apr-20 May-20
TravelRestaurantsHardware storesAutomotiveClothingEntertainment
14-day ma of daily dollar volume oftransactions, y/y % (Last: Jun 15)
Sources: Scotiabank Economics, Customer Insights, Data & Analytics.
Scotiabank Canadian Transactions Data:Sales by Merchant Category
-20
0
20
40
60
80
100
120
140
160
180
Jan-20 Feb-20 Mar-20 Apr-20 May-20
Telecom servicesComputer NetworkComputer SoftwareGrocer iesDigital goods
14-day ma of daily dollar volume oftransactions, y/y % (Last: Jun 15)
Sources: Scotiabank Economics, Customer Insights, Data & Analytics.
Scotiabank Canadian Transactions Data:Sales by Merchant Category
Scotia FX Risk Appetite Index
• Our daily risk appetite index—a factor of
financial risk variables such as CDS spreads
and market volatility—has bounced off its
200DMA owing to ‘second-wave’ concerns
but remains around its highest point since
early-March as the gradual reopening of the
global economy and rising commodity prices
lead investors back to riskier assets.
-75
-50
-25
0
25
50
01/20 03/20 05/20
MfgFinanceProf/Biz svcsEduc/HealthLeisure/HospTotal
Source: Chetty, Friedman, Hendren, Stepner (2020), Opportunity Insights, Burning Glass,
Scotiabank FICC Strategy.
US Job Postings by Industry
% change from Jan 4-31 baseline, 7-dma (Last: Jun 19)
Affinity Solutions US Card Spending Data
• Affinity Solutions debit and credit card payments data show that retail sales in the US remain 9%
off their baseline level earlier in the year with grocery purchases remaining elevated as individuals
spend more time at home while spending on recreation and transportation remains quite
depressed at ~ 50% lower than baseline, while accommodation and food spending is about 35%
lower. Spending on general merchandise and apparel has rebounded to ‘only’ 9% below baseline.
• With greater marginal propensity to consume, spending by people living in regions where the
median income is in the bottom quartile of the income distribution has rebounded to sit at less than
3% when compared to baseline with the large jump in the series following the distribution of the
Federal government's $1,200 stimulus cheque in mid-April. This is compared to those in higher-
income areas where spending is still about 13% lower—note that the stimulus cheque amount
declines for joint incomes above $150k/yr and above $75k/yr for single-filers.
Burning Glass US Jobs Postings
• Weekly Burning Glass data show that US job
postings have materially rebounded from
their late-April/early-May depths, when
compared to their January baseline. Total job
postings are about 14% lower compared to
39% lower in late-April. Openings in the
leisure and hospitality sector have bounced
back quickly from a lower base and are now
only 10% below their baseline. Openings in
financial services are ‘only’ about 10% lower.
-3.00
-2.50
-2.00
-1.50
-1.00
-0.50
0.00
0.50
1.00
10/19 12/19 02/20 04/20 06/20
Source: Bloomberg, Scotiabank FICC Strategy.
Scotiabank FX Strategy Risk Appetite Index
index, 2008-present avg. = 0(Last: Jun 25)
100DMA
Risk appetite index
200DMA
40DMA
-50
-25
0
25
01/20 03/20 05/20
TopMiddleBottom QuartileAll
Source: Chetty, Friedman, Hendren, Stepner (2020),Opportunity Insights, Aff inity Solutions,
Scotiabank FICC Strategy.
US Credit/Debit Card Spending by ZIP Code Median Income Quartile% change from Jan 4-31 baseline, 7-dma (Last: Jun 17)
-100
-75
-50
-25
0
25
50
75
100
01/20 03/20 05/20
AllAcc/FoodGroceriesHealthTrans/WHArts/Ent/RecGenMerch/Apparel
Source: Chetty, Friedman, Hendren, Stepner (2020), Opportunity Insights, Aff inity Solutions,
Scotiabank FICC Strategy.
US Credit/Debit Card Spending by Sector
% change from Jan 4-31 baseline, 7-dma (Last: Jun 17)
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GLOBAL FX STRATEGY | FX QUICK NOTES Monday, June 25, 2020
30
40
50
60
70
80
01/20 04/20 07/20 10/20
20172018201920202017-19 avg
Source: RTE, Scotiabank FICC Strategy.
France Energy Demand
000 mw h 5pm, 14-dma(Last: Jun 24)
latest: 91% of avg
60
65
70
75
80
85
90
95
100
105
01/20 04/20 07/20 10/20
Thousands
20172018201920202017-19 avg
Source: EIA, Scotiabank FICC Strategy.
US Midwest Energy Demand
000 mw h 5pm, 14-dma(Last: Jun 24)
latest: 92% of avg
Energy Demand
• Hourly energy demand data shows the impact of the economic lockdown on industrial sector
activity as a large share of factories and offices remain idle—although in the case of the latter
some of this demand is substituted by residential demand which is less energy efficient.
• Energy demand in the countries/regions that we track has generally been around 10% lower
than the average of the previous two/three years over the past few weeks, while abnormally
high temperatures in Ontario increase air-conditioning usage temporarily. It is more likely that
the current slump in energy demand observed in France, Germany, the US Midwest, and
Mexico reflects more accurately the magnitude of the economic depression.
22
27
32
37
42
47
52
01/20 03/20 05/20 07/20 09/20 11/20
20172018201920202017-19 avg
Source: TEPCO, Scotiabank FICC Strategy.
Japan Energy Demand000 mw h 5pm, 14-dma(Last: Jun 24)
latest = 99% of avg
10
12
14
16
18
20
01/20 04/20 07/20 10/20
20172018201920202017-19 avg
Source: SMARD, Scotiabank FICC Strategy.
Germany Energy Demand
000 mw h 5pm, 14-dma(Last: Jun 24)
latest = 89% of avg.
11
13
15
17
19
21
01/20 04/20 07/20 10/20
20172018201920202017-19 avg
Source: IESO, Scotiabank FICC Strategy.
Ontario Energy Demand
000 mw h 5pm, 14-dma(Last: Jun 24)
latest: 100% of avg
25
30
35
40
45
01/20 04/20 07/20 10/20
2018
2019
2020
2018-19 avg
Source: Cenace, Scotiabank FICC Strategy.
Mexico Energy Demand
000 mw h, daily max
(Last: Jun 23)
latest: 90% of avg
60
65
70
75
80
85
01/20 04/20 07/20 10/20
2018
2019
2020
2018-19 avg
Source: ONS, Scotiabank FICC Strategy.
Brazil Energy Demand
000 mw h, 5 pm (Last: Jun 23)
latest: 97% of avg
0
20
40
60
80
100
02/20 03/20 04/20 05/20 06/20
China GermanyUK JapanMexico New ZealandUS Canada
Source: Hale, Webster, Petherick, Phillips, and Kira (2020). Oxford COVID-19 Government Response Tracker, Blavatnik School of Government , Scotiabank FICC Strategy.
Incorporates public information on 17 indicators of government responses.
Oxford Lockdown Stringency Index
100 = strictest response Lockdown Stringency Index
• Oxford University's lockdown stringency index—a useful
guideline to track containment measures around the
globe—shows the progress that New Zealand has made on
bringing the coronavirus under control which has allowed
them to loosen restrictions that therefore leaves the country
better positioned for a prompt economic rebound. Similarly,
Germany continues to loosen restrictions which will likely
result in an outperformance of the country's economy within
the euro-bloc. After a slow response to the outbreak, the
Oxford index suggests that restrictions in Mexico are the
strictest across major economies, behind China which
recently re-imposed some measures owing to an outbreak
in Beijing.
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GLOBAL FX STRATEGY | FX QUICK NOTES Monday, June 25, 2020
-100
-80
-60
-40
-20
0
20
40
01/20 02/20 03/20 04/20 05/20 06/20
US m. vehicles & eq.US ex mveCanada m. vehicles & eq.Canada ex mve
Source: CN, AAR, Scotiabank FICC Strategy.
Canada and US Rail Merchandise Shipments
y/y % change in carloads(Last: Jun 19)
Rail Shipments
• Weekly rail shipments data shows that
demand for motor vehicles and equipment in
North America has recovered, but remains
weak, after grinding to a halt as factories
shut down and are now resuming production,
while shipments of other goods remain
depressed and have stalled around 20%
below last year’s levels.
US Steel Production
• Weekly US steel production data suggests
that activity in the manufacturing and
construction sectors has not yet significantly
improved for steel mills to ramp up
production—which stands around 35% than
at this point last year.
Shanghai Steel Inventories
• Chinese industrial output appears to have
recovered quickly, but possibly stalled, as
steel inventory levels in the country are
depleted from record-highs as reflected by
weekly Shanghai storage data for both
traders and steel mills. Steel mill inventories
are nearly at ‘normal’ levels.
0.2
0.3
0.4
0.5
0.6
0.7
0.6
0.8
1.0
1.2
1.4
1.6
Jan Feb Mar Apr May Jun
Source: Antaike, Mysteel, Scotiabank FICC Strategy.
Shanghai Steel Inventories
mn tonnes(Last: Jun 19)
2020traders
(LHS)
2019traders
(LHS)
mn tonnes(Last: Jun 19)
2020steel mills
(RHS)
2019steel mills
(RHS)1.0
1.2
1.4
1.6
1.8
2.0
Jan Feb Mar Apr May Jun
Source: AISI, Scotiabank FICC Strategy.
US Steel Production
mn short tonnes(Last: Jun 19)
2020
2019
Germany Truck Mileage Index
• Daily truck mileage data for Germany—a
close indicator of industrial production—
showed a sharp rebound in economic activity
in Europe’s largest economy before
retreating in the past week. As of June 10,
miles traveled by trucks in Germany were
down by around 4% when compared to the
same period in 2019. This series and other
data again point to the German economy
recovering at a fast pace as lockdown
measures are lifted.
ShopperTrak Retail Traffic
• ShopperTrak retail foot traffic data show that
retail activity has picked up quickly in France
and Germany to almost match the decline in
Japan on a year-on-year basis following the
reopening of non-essential businesses.
Retail sales in the UK remain nevertheless
depressed with most shops in the country
closed as of the latest observation but last
week saw a rebound in the series with
retailers in England allowed to reopen on
June 15th.
-100
-80
-60
-40
-20
0
20
01/20 02/20 03/20 04/20 05/20 06/20
UK
France
Germany
Hong Kong
Source: Shopper Trak, Scotiabank FICC Strategy.
ShopperTrak Retail Foot Traffic
y/y % change(Last: w eek of Jun 15)
-16
-12
-8
-4
0
4
10/19 12/19 02/20 04/20 06/20
Source: Destatis, Scotiabank FICC Strategy.
Germany Truck Mileage Index
y/y % change(Last: Jun 17)
-8
-6
-4
-2
0
2
10/19 12/19 02/20 04/20 06/20
Source: Bundesbank, Scotiabank FICC Strategy.
Bundesbank Weekly Activity Index
q/q % implied change in real GDP(Last: Jun 22)
Bundesbank Activity Index
• The Bundesbank’s high-frequency economic
activity index estimates that the German
economy was contracting at a rate of around
6.3% in the second quarter, up from –7.1%
last week, seemingly now reflecting the
increase in activity in the country’s industrial
and services sectors.
6
GLOBAL FX STRATEGY | FX QUICK NOTES Monday, June 25, 2020
0
20
40
60
80
100
120
01/20 02/20 03/20 04/20 05/20 06/20
Source: Flight Radar, Scotiabank FICC Strategy.
Flight Radar TrackedCommercial Flights Globally
000s per day(Last: Jun 24)
7DMA
TSA Checkpoint Throughput
• Daily US TSA shows that traffic through US
airports remains heavily subdued at less than
21% when compared to 2019, with an
average of only 550k travelers going through
security screenings in the past week versus
over 2.6mn last year. As domestic and
international restrictions are lifted we should
see a more important pick-up in travel
activity.
Flight Radar Commercial Flights
• Daily flights data from Flight Radar points to
an unsurprising massive decline in air travel
(about 55% lower compared to early-2020)
owing to travel bans and other strict
restrictions on domestic and international
travel. As some countries eradicate (or
sharply limit the spread of the virus) some
travel will resume between ‘COVID-free’
nations.
0
500
1000
1500
2000
2500
3000
02/20 03/20 04/20 05/20
Source: TSA, Scotiabank FICC Strategy.
TSA Checkpoint Travelers
000s passengers(Last: Jun 24)
2020 7-dma(Latest = 21% of 2019)
2019 7-dma
-120
-100
-80
-60
-40
-20
0
20
40
02/20 03/20 04/20 05/20 06/20
GermanyMexicoUKAustraliaUSCanada
Source: Opentable, Scotiabank FICC Strategy.
OpenTable Restaurant Visits
y/y% change(Last: Jun 24)
OpenTable Restaurant Visits
• Daily OpenTable restaurant foot traffic data
points to a solid rebound in restaurant visits
in Germany and Australia (pent-up demand)
after governments allowed these businesses
to reopen—under certain conditions. The
relaxation of measures in some US states
and Canadian provinces has also marginally
begun to feed into the data; the latest spike
likely relates to Father’s Day bookings.
0
25
50
75
100
125
150
01/20 02/20 03/20 04/20 05/20 06/20
Driving
Walking
Transit
Baseline
Source: Apple, Scotiabank FICC Strategy.
Canada Apple Mobility Trends
routing requests, 7-dma(Last: Jun 23)
0
25
50
75
100
125
150
01/20 02/20 03/20 04/20 05/20 06/20
Driving
Walking
Transit
Baseline
Source: Apple, Scotiabank FICC Strategy.
US Apple Mobility Trends
routing requests, 7-dma(Last: Jun 20)
0
25
50
75
100
125
150
01/20 02/20 03/20 04/20 05/20 06/20
Driving
Walking
Transit
Baseline
Source: Apple, Scotiabank FICC Strategy.
Germany Apple Mobility Trends
routing requests, 7-dma(Last: Jun 20)
Apple Mobility Trends
• Daily Apple data tracking Apple Maps routing requests shows that driving and walking mobility in Canada, the US, and Germany now exceeds
their respective baseline levels of mid-January. However, only in Germany has there been a significant increase in transit usage that points to a
faster return to economic normality than in North America as lockdown measures are lifted; see Oxford U’s lockdown stringency index that shows
Germany’s restrictions are now significantly more relaxed than in most of its peers.
7
GLOBAL FX STRATEGY | FX QUICK NOTES Monday, June 25, 2020
New Confirmed COVID-19 Cases by US State and Canadian Province, 7-day ma (Last : June 24)
Source: Bloomberg, Scotiabank FICC Strategy. First data point is March 3.
WA
OR
CA
HI
ID
NV
UT
AZ
MT
CO
NM
ND
SD
NE
KS
OK
TX
MN
IA
MO
AR
LA
KY
TN
MS
OH PA
VA
SC
GA
MD
NJ
NY MA
VT
CT
DE
NH
ME
RIWY
WV
NC
AL
DC
MI
IN
IL
WI
FL
BC AB SK MB ON QC NB NS
NLPE
AK
8
GLOBAL FX STRATEGY | FX QUICK NOTES Monday, June 25, 2020
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