Thursday, July 26, 2007
Choas After S&P Downgrades
14:00 EDT US Markets are feeling the full force of a Standard & Poors downgrade of CDO (Sub-Prime lending debt) and the possible impact of the US housing woes on the economy. The S&P lowered ratings not just in the US recently but also on European Collateralized Debt Obligations in a sweeping move that forces Investment Funds to re-align holdings as per the strict guidelines on the debt ratings of their portfolios. The yield on 2 and 10 year Treasury Notes declined dramatically as the effects of the downgrades took place. Lower yields equates to lower interest rates, and lower interest rates equals a lower value $.
The Economic Week Ahead
Cad Retail Smashes Numbers
- 15:45 EDT US Equity Markets are going into the close tracking a 2% loss overall today, to add to the 1% haircut from yesterday. Same story, different day; US Sub-Prime lending that was leveraged by Hedge Funds has created some Black Holes that now have to be accounted for. 14:00 EDT The Aussie CPI data is important tonight with an increase expected to 1.0%. A big move, but still within the RBA’s yearly targets. The Bank may not have to raise even if this number hits, if it misses the Aussie may come under selling pressure. 13:30 EDT ‘Instant Forex Rewards‘ is an article posted today under the ‘Economic Articles’ section of the site, it looks at expectancy and reality. 11:00 EDT US Housing data is dragging on global Equity markets, as the fear of mortgage defaults weighs heavily. The US markets are off by 1% 10:00 EDT Richmond Fed Manufacturing conditions printed at 4, as expected. 08:30 EDT Canadian Retail Sales, expected at 0.6%, printed off at a huge 2.3%. Inflationary pressures are in the economy. 06:00 EDT UK Industrial Trends were in at -6, down from +8, a big miss on a report that serves as a test of manufacturing sentiment. 06:00 EDT Euro Current Account came in at -8.6B a slip from the 0.0B expected. The Income flows to the Euro Zone were very low. 04:00 EDT Euro Manufacturing PMI was lower, see the in-depth Euro Zone report in ‘Global Commentary’ section below.03:00 EDT The Headline News link below has the weeks economic releases plotted for each region.
US Beige Book Details
- 14:00 EDT Beige Book details are as follows: Wage gains are moderate, growth is contained as moderate, housing sector is a drag, energy prices are an issue for consumers, wage pressures are contained, manufacturing has found a base, overall moderate is the key word, consumer spending is lower. The economy has slowed to a pace that inflation is not an issue, but the housing problems and mortgage payments may weigh going into the end of the year. 11:00 EDT The Fed Beige Book information is released at 14:00 today and will reveal the details that the FOMC will debate at the next policy meeting in two weeks time. 10:30 EDT Oil Inventories were reported lower today, as expected, at -1.1m barrels. Natural Gas numbers were higher. 10:00 EDT US Existing Home Sales, expected in at 5.87m units, came in at 5.75m., lower by 3%. Median prices rose slightly but inventories are still sitting at over 8 months of supply. Rental property numbers increased, the yearly figures are 11% lower than last year. A near-term bottom may have been found on the $, tomorrows New Home Sales will be important, bearing in mind a lot of bad news is already in the currency valuations. 09:30 EDT Global Equity Markets have contained the selling from Tuesday and are looking at Earnings to steady the ship today.09:00 EDT The European ‘Global Commentary’ has an in-depth look at the overnight trading session, and what to expect from today.
Wednesday, July 18, 2007
Dollar Slumped on Housing Warnings
The dollar fell sharply across the board as news about the subprime sector raised worries over the nation’s housing market and the whole economy. US stock market and bond yields were also hit by the housing warnings.
Two large home appliance retailers, Home Depot and Sears, both lowered their sales and earnings forecasts due to weak housing market. The nation’s second largest homebuilder, DR Horton, reported its third quarter orders dropped 40%.
The euro rose 1 cent to an all-time high at 1.3739 versus the dollar. The British pound also strengthened sharply against the dollar, to as high as 2.0273. The yen rebounded against the ailing dollar, down from above 123 to test the 122 level. Should the yen break the key support at 121.80, the correction may extend further to 120.
Two large home appliance retailers, Home Depot and Sears, both lowered their sales and earnings forecasts due to weak housing market. The nation’s second largest homebuilder, DR Horton, reported its third quarter orders dropped 40%.
The euro rose 1 cent to an all-time high at 1.3739 versus the dollar. The British pound also strengthened sharply against the dollar, to as high as 2.0273. The yen rebounded against the ailing dollar, down from above 123 to test the 122 level. Should the yen break the key support at 121.80, the correction may extend further to 120.
Dollar Fell on Subprime Worries
The greenback suffered further losses on Tuesday as more negative news related to the deteriorating subprime mortgage market was reported.
Two world’s largest credit rating agencies, Standard & Poor’s and Moody’s, today warned of ratings cut on over $17 billion risky mortgages debt, most of which are subprime loans. Coupled with profit warnings from homebuilder and home appliance retailers, subprime debt rating downgrading lead investors highly worried about the subprime issue in US housing market and the severe impact it may spread into the broader economy. The euro formed a base at 1.3730 and refreshed record high to 1.3783 versus the dollar. Following yesterday’s rally, the British pound gained another 1 cent to as high as 2.0361 against the dollar.
The euro was also boosted by hawkish comments from the European Central Bank officials. ECB President Trichet reiterated that the bank’s monetary policy remained accommodative, signaling further interest rate increases. ECB executive board member, Jurgen Stark, said today that euro appreciation reflected the strength of economic growth in Europe.
Two world’s largest credit rating agencies, Standard & Poor’s and Moody’s, today warned of ratings cut on over $17 billion risky mortgages debt, most of which are subprime loans. Coupled with profit warnings from homebuilder and home appliance retailers, subprime debt rating downgrading lead investors highly worried about the subprime issue in US housing market and the severe impact it may spread into the broader economy. The euro formed a base at 1.3730 and refreshed record high to 1.3783 versus the dollar. Following yesterday’s rally, the British pound gained another 1 cent to as high as 2.0361 against the dollar.
The euro was also boosted by hawkish comments from the European Central Bank officials. ECB President Trichet reiterated that the bank’s monetary policy remained accommodative, signaling further interest rate increases. ECB executive board member, Jurgen Stark, said today that euro appreciation reflected the strength of economic growth in Europe.
FX Sideways, Awaits Data
At 12:30 AM Japan May Capacity Utilization (exp n/f, prev –1.6%)
Japan May Industrial Production (exp n/f, prev –0.4%)
At 2:00 AM Bank of Japan July Report
At 5:00 AM Eurozone May Industrial Production m/m (exp 1.0%, prev –0.8%)
Eurozone May Industrial Production y/y (exp 3.0%, prev 3.3%)
Eurozone Q1 GDP q/q (exp 0.6%, prev 0.9%)
Eurozone Q1 GDP y/y (exp 3.0%, prev 3.3%)
At 8:30 AM US Weekly Jobless Claims (exp 315k, prev 318k)
US May Trade Deficit (exp $60.0 bln, prev $58.5 bln)
Canada May Trade Balance (exp C$5.5bln, prev C$5.76bln)
The greenback continues to reel from burgeoning fears that the subprime mortgage debacle will extend into other sectors, aggravating the already slowing
US economy. The currency remains mired near all-time lows against the euro near 1.3750, while the sterling hovers around 26-year highs at 2.0316. The possible downgrades from S&P’s and Moody’s reinforce qualms that the implications of further deterioration in subprime mortgages may have been initially underestimated, with the impact reverberating throughout the financial markets.
US economic data slated for release on Thursday include weekly jobless claims and the May trade deficit. Initial jobless claims are largely unchanged, down marginally to 315k versus 318k from the previous week. Meanwhile, the May US trade deficit is forecasted to edge higher following April’s smaller-than-expected deficit – back up to $60 billion from $58.5 billion. The April report, however, revealed a burgeoning deficit with China at $19.5 billion, and given China’s recent record surplus – we expect the US-China trade gap to expand further and prompting renewed political jawboning for yuan revaluation.
Japan May Industrial Production (exp n/f, prev –0.4%)
At 2:00 AM Bank of Japan July Report
At 5:00 AM Eurozone May Industrial Production m/m (exp 1.0%, prev –0.8%)
Eurozone May Industrial Production y/y (exp 3.0%, prev 3.3%)
Eurozone Q1 GDP q/q (exp 0.6%, prev 0.9%)
Eurozone Q1 GDP y/y (exp 3.0%, prev 3.3%)
At 8:30 AM US Weekly Jobless Claims (exp 315k, prev 318k)
US May Trade Deficit (exp $60.0 bln, prev $58.5 bln)
Canada May Trade Balance (exp C$5.5bln, prev C$5.76bln)
The greenback continues to reel from burgeoning fears that the subprime mortgage debacle will extend into other sectors, aggravating the already slowing
US economy. The currency remains mired near all-time lows against the euro near 1.3750, while the sterling hovers around 26-year highs at 2.0316. The possible downgrades from S&P’s and Moody’s reinforce qualms that the implications of further deterioration in subprime mortgages may have been initially underestimated, with the impact reverberating throughout the financial markets.
US economic data slated for release on Thursday include weekly jobless claims and the May trade deficit. Initial jobless claims are largely unchanged, down marginally to 315k versus 318k from the previous week. Meanwhile, the May US trade deficit is forecasted to edge higher following April’s smaller-than-expected deficit – back up to $60 billion from $58.5 billion. The April report, however, revealed a burgeoning deficit with China at $19.5 billion, and given China’s recent record surplus – we expect the US-China trade gap to expand further and prompting renewed political jawboning for yuan revaluation.
Dollar Weak on Subprime Concern
The dollar remains under pressure from the deteriorating subprime mortgage market. The euro set a record high at 1.3797 versus the dollar and the sterling hovers around high levels 2.03.
The market was shocked by continuous warnings on the housing sector this week. Large home appliances retailers lowered profit forecasts, and Standard & Poor’s and Moody’s may downgrade credit rating of over $17 billion debt backed mostly by subprime mortgage. According to Bloomberg, mortgage foreclosures rose 56% year on year to 926k in the first half of this year, in June the rise is a scary 87%. This underlines the fact that the US housing market is melting down and the impact may spread into the broader economy.
Economic data from US today came out in line with expectations and did not impact the dollar much. Trade deficit rose from 58.5 billion to 60 billion in May as expected. Weekly jobless claims came out at 308k, better than the estimate of 315k and the prior reading of 318k.
The market was shocked by continuous warnings on the housing sector this week. Large home appliances retailers lowered profit forecasts, and Standard & Poor’s and Moody’s may downgrade credit rating of over $17 billion debt backed mostly by subprime mortgage. According to Bloomberg, mortgage foreclosures rose 56% year on year to 926k in the first half of this year, in June the rise is a scary 87%. This underlines the fact that the US housing market is melting down and the impact may spread into the broader economy.
Economic data from US today came out in line with expectations and did not impact the dollar much. Trade deficit rose from 58.5 billion to 60 billion in May as expected. Weekly jobless claims came out at 308k, better than the estimate of 315k and the prior reading of 318k.
Dollar Steady on Mixed Data
The dollar climbed up from lows versus the euro and sterling and stabilized after mixed data from US today. The euro stepped back to below 1.38 area after reaching all-time high at 1.3813 versus the dollar. The sterling hovers above the 2.03 level against the dollar.
Early in the morning, a surprisingly disappointing retail sales report pushed the dollar to fresh all-time low versus the euro. US retail sales fell 0.9% in June, far below the estimate of a 0.1% increase. Excluding autos, core retail sales dropped 0.4%, also falling short of a call for a 0.2% rise.
The dollar was steady after robust consumer sentiment released later in the trading session. University of Michigan sentiment index rose to 92.4 in June, up from 85.3 in the prior month. Besides, US business inventories for June came out at 0.5%, beating the estimate of 0.3%.
Early in the morning, a surprisingly disappointing retail sales report pushed the dollar to fresh all-time low versus the euro. US retail sales fell 0.9% in June, far below the estimate of a 0.1% increase. Excluding autos, core retail sales dropped 0.4%, also falling short of a call for a 0.2% rise.
The dollar was steady after robust consumer sentiment released later in the trading session. University of Michigan sentiment index rose to 92.4 in June, up from 85.3 in the prior month. Besides, US business inventories for June came out at 0.5%, beating the estimate of 0.3%.
Saturday, July 7, 2007
Greenback Extended Loss
The greenback extended its loss across the board on Monday as concerns over subprime mortgage meltdown and the Fed future policy move continue to weigh on investors sentiment. The dollar hit a 26-year low versus the British pound at 2.0172, while dropped to a 7-week low against the euro and the pair is on the way to attempt a multi-year high at 1.3680 set in late April.
The European Central Bank and the Bank of England will hold monetary policy meeting this Wednesday and are widely expected to hold interest rates at 4.00% and 5.50% respectively. There is still some speculation that the BOE may lift rates and surprise the market again. Both of the banks are likely to issue a pretty hawkish statement on the economy and inflation to set stage for at least one more rate hike in the second half of the year.
Earlier in the session, the dollar was little changed after a report showed US manufacturing ISM index for June came in at 56 as expected, slightly above the previous reading of 55. The market tomorrow will look to Swiss CPI, US durable goods orders, US pending home sales, and US factory orders.
The European Central Bank and the Bank of England will hold monetary policy meeting this Wednesday and are widely expected to hold interest rates at 4.00% and 5.50% respectively. There is still some speculation that the BOE may lift rates and surprise the market again. Both of the banks are likely to issue a pretty hawkish statement on the economy and inflation to set stage for at least one more rate hike in the second half of the year.
Earlier in the session, the dollar was little changed after a report showed US manufacturing ISM index for June came in at 56 as expected, slightly above the previous reading of 55. The market tomorrow will look to Swiss CPI, US durable goods orders, US pending home sales, and US factory orders.
USD Struggles, GBP 26-yr High
At 10:00 AM US May Pending Home Sales (exp 0.2%, prev -3.2%)
US May Factory Orders (exp -1.2%, prev 0.3%)
US May Durable Goods Orders (exp -2.8%, prev -2.8%
The dollar continued to lose ground against the majors ahead of anticipated monetary policy tightening from the ECB and BoE later in the week. The greenback fell to its lowest level in 26-years versus the sterling at 2.0194 and relinquished the 1.36-handle against the euro. With the European Central Bank and the Bank of England both largely expected to raise interest rates by 25-basis points and the Fed seen remaining on hold for the remainder of the year, traders have rewarded the currencies with hawkish central banks.
Despite the holiday-shortened week for the US market, the calendar is complete with key economic reports. In the session ahead, data slated for release consist of May pending home sales, factory orders and durable goods orders. The May pending home sales are seen increasing by 0.2%, improving from a 3.2% decline in the prior month. The factory orders’ reading is expected to fall by 1.2% versus a 0.3% increase from April. Meanwhile, May durable goods are seen unchanged from the previous month, holding steady at -2.8%. The key focus however, will be Friday’s labor report, providing a gauge on how resilient the jobs market is to the continued slowdown in the US economy.
US May Factory Orders (exp -1.2%, prev 0.3%)
US May Durable Goods Orders (exp -2.8%, prev -2.8%
The dollar continued to lose ground against the majors ahead of anticipated monetary policy tightening from the ECB and BoE later in the week. The greenback fell to its lowest level in 26-years versus the sterling at 2.0194 and relinquished the 1.36-handle against the euro. With the European Central Bank and the Bank of England both largely expected to raise interest rates by 25-basis points and the Fed seen remaining on hold for the remainder of the year, traders have rewarded the currencies with hawkish central banks.
Despite the holiday-shortened week for the US market, the calendar is complete with key economic reports. In the session ahead, data slated for release consist of May pending home sales, factory orders and durable goods orders. The May pending home sales are seen increasing by 0.2%, improving from a 3.2% decline in the prior month. The factory orders’ reading is expected to fall by 1.2% versus a 0.3% increase from April. Meanwhile, May durable goods are seen unchanged from the previous month, holding steady at -2.8%. The key focus however, will be Friday’s labor report, providing a gauge on how resilient the jobs market is to the continued slowdown in the US economy.
Pound Holds Near 26-Yr High, Awaits BOE
The greenback continues to trade under pressure against the euro and sterling on Tuesday. The British pound hovers near the 26-year high at 2.0194 touched in the European session, while the euro stays around 1.36 versus the dollar.
The market is pretty bearish on the dollar and is currently concerns more about the global interest rate differentials than economic data. The dollar was little changed after a run of mixed US data this morning. US pending home sales unexpectedly declined 3.5% in May, raising worries about the housing market in the US. Factory orders dropped 0.5% in May, better than an estimate of –1.2%. Durable goods orders fell 2.4%, slightly better than the forecast of –2.8%.
US financial markets will be closed for Independence Day on Wednesday and therefore the currency market is likely to be slow due to relatively low trading volume.
The market is pretty bearish on the dollar and is currently concerns more about the global interest rate differentials than economic data. The dollar was little changed after a run of mixed US data this morning. US pending home sales unexpectedly declined 3.5% in May, raising worries about the housing market in the US. Factory orders dropped 0.5% in May, better than an estimate of –1.2%. Durable goods orders fell 2.4%, slightly better than the forecast of –2.8%.
US financial markets will be closed for Independence Day on Wednesday and therefore the currency market is likely to be slow due to relatively low trading volume.
UK CIPS index rose to 57.7 in June
The UK's services sector, which accounts for nearly three quarters of the whole economy, rebounded in June after two muted readings.
The June business activity purchasing managers' index from the Chartered Institute of Purchasing and Supply came in at 57.7, higher than May's 57.2 and beating expectations of economists.
The employment sub-index climbed to 54.5 from 54.1. Meanwhile, business expectations improved, rising to 73.7 from 72.0.
The June business activity purchasing managers' index from the Chartered Institute of Purchasing and Supply came in at 57.7, higher than May's 57.2 and beating expectations of economists.
The employment sub-index climbed to 54.5 from 54.1. Meanwhile, business expectations improved, rising to 73.7 from 72.0.
Euro-Zone retail sales down 0.5% in May
Retail sales volume in the 13 countries that share the euro slowed more than expected in May.
The volume of retail trade fell 0.5% on the month but rose 0.4% on the year, said Eurostat. This was a sharper fall than expected. Economists had predicted that sales volume would fall 0.3% in May.
Eurostat also revised down its estimates for sales growth in April to a 0.1% decline on the month and 1.5% growth on the year, having previously calculated that sales grew 0.2% on the month and 1.6% on the year.
The volume of retail trade fell 0.5% on the month but rose 0.4% on the year, said Eurostat. This was a sharper fall than expected. Economists had predicted that sales volume would fall 0.3% in May.
Eurostat also revised down its estimates for sales growth in April to a 0.1% decline on the month and 1.5% growth on the year, having previously calculated that sales grew 0.2% on the month and 1.6% on the year.
Pound Extended Gains, Eyes on BOE & ECB
Major currency pairs trade in narrow ranges today due to US Independence Day.
The British pound extended its gains versus the dollar on speculations that the Bank o f England may surprisingly lift interest rates to 5.75% on monetary policy meeting ended Thursday morning. The currency reached as high as 2.0205 against the dollar on Wednesday.
The euro stands firmly above the 1.36 handle versus the dollar. Euro-zone services PMI increased from 57.3 to 58.3 in June, indicating manufacturing activity growth quickened. While another report showed retail sales in the euro-zone increased less than expected in May. The market will focus on the European Central Bank interest rate announcement tomorrow morning. It is widely expected that the ECB will keep rates at 4.00% unchanged. ECB Governor Trichet will give a speech at the post-meeting press conference at 8:30 EST. Should he speak in hawkish tone about inflation, the market will take this as a signal for further rate increases, which will give the euro a boost. In the past, analysts usually look for the word “vigilance” in his word to assess the central bank’s attitude towards inflation control.
The British pound extended its gains versus the dollar on speculations that the Bank o f England may surprisingly lift interest rates to 5.75% on monetary policy meeting ended Thursday morning. The currency reached as high as 2.0205 against the dollar on Wednesday.
The euro stands firmly above the 1.36 handle versus the dollar. Euro-zone services PMI increased from 57.3 to 58.3 in June, indicating manufacturing activity growth quickened. While another report showed retail sales in the euro-zone increased less than expected in May. The market will focus on the European Central Bank interest rate announcement tomorrow morning. It is widely expected that the ECB will keep rates at 4.00% unchanged. ECB Governor Trichet will give a speech at the post-meeting press conference at 8:30 EST. Should he speak in hawkish tone about inflation, the market will take this as a signal for further rate increases, which will give the euro a boost. In the past, analysts usually look for the word “vigilance” in his word to assess the central bank’s attitude towards inflation control.
FX Quiet, Awaits ECB, BoE
At 1:00 AM Japan May Leading Indicator (exp n/f, prev 18.2)
Japan May Coincident Indicator (exp n/f, prev 65.0)
At 4:30 AM UK May Manufacturing Production m/m (exp 0.3%, prev 0.3%)
UK May Manufacturing Production y/y (exp 0.9%, prev 1.3%)
UK May Industrial Production m/m (exp 0.3%, prev 0.3%)
UK May Industrial Production y/y (exp 0.3%, prev 0.4%)
At 6:00 AM Germany May Industrial Production m/m (exp 0.5%, prev –1.2%)
At 7:00 AM Bank of England Monetary Policy Decision (exp 5.75%, prev 5.5%)
At 7:45 AM ECB Monetary Policy Decision (exp 4.25%, prev 4.0%)
At 8:15 AM US June ADP Payrolls (exp 100k, prev 97k)
At 8:30 AM Canada Building Permits (exp 5.6%, prev –8.4%)
ECB President Trichet’s Press Conference
The dollar continues to trade on weak footing versus the majors, mired near 26-year lows against the sterling and around the 1.36-level against the euro. Central Bank monetary policy announcements will garner the lion’s share of market attention in the coming session, as traders eagerly await the rate decisions from the European Central Bank and the Bank of England. The sterling remains favored, hovering near its highest level in 26-years as markets anticipate further tightening from the BoE over the coming months to combat lingering inflationary pressure in the economy.
The US economic calendar for Thursday is light, seeing only the release of the June ADP payrolls report – which is forecasted to remain largely unchanged up 3k to 100k. Traders will also analyze the ADP payrolls as a proxy to Friday’s more important US jobs report. The June non-farm payrolls figure is expected to decline to 120k, from 157k in May. Meanwhile, the unemployment rate is forecasted to remain unchanged at 4.5%.
Japan May Coincident Indicator (exp n/f, prev 65.0)
At 4:30 AM UK May Manufacturing Production m/m (exp 0.3%, prev 0.3%)
UK May Manufacturing Production y/y (exp 0.9%, prev 1.3%)
UK May Industrial Production m/m (exp 0.3%, prev 0.3%)
UK May Industrial Production y/y (exp 0.3%, prev 0.4%)
At 6:00 AM Germany May Industrial Production m/m (exp 0.5%, prev –1.2%)
At 7:00 AM Bank of England Monetary Policy Decision (exp 5.75%, prev 5.5%)
At 7:45 AM ECB Monetary Policy Decision (exp 4.25%, prev 4.0%)
At 8:15 AM US June ADP Payrolls (exp 100k, prev 97k)
At 8:30 AM Canada Building Permits (exp 5.6%, prev –8.4%)
ECB President Trichet’s Press Conference
The dollar continues to trade on weak footing versus the majors, mired near 26-year lows against the sterling and around the 1.36-level against the euro. Central Bank monetary policy announcements will garner the lion’s share of market attention in the coming session, as traders eagerly await the rate decisions from the European Central Bank and the Bank of England. The sterling remains favored, hovering near its highest level in 26-years as markets anticipate further tightening from the BoE over the coming months to combat lingering inflationary pressure in the economy.
The US economic calendar for Thursday is light, seeing only the release of the June ADP payrolls report – which is forecasted to remain largely unchanged up 3k to 100k. Traders will also analyze the ADP payrolls as a proxy to Friday’s more important US jobs report. The June non-farm payrolls figure is expected to decline to 120k, from 157k in May. Meanwhile, the unemployment rate is forecasted to remain unchanged at 4.5%.
$ Rebounded on Robust ISM
The greenback rebounded against its major rivals following the stronger-than-expected non-manufacturing ISM index. The index rose from 59.7 to 60.7 in June, beating the estimate of 58. The euro dipped below 1.36 handle versus the dollar, while the yen weakened to reach 123.00 against the dollar.
Earlier, US ADP report showed the economy added 150k jobs in private sector in June, far more than the forecast of 100k and a reading of 97k in the prior month. The weekly jobless claims came out at 318k, slightly higher than the forecast of 313k. The market will focus on the non-farm payrolls for June to be released by the Labor Department tomorrow morning for more clues on the nation’s labor market.
The European Central Bank kept interest rates unchanged at 4.00% as expected. ECB Governor Trichet did not use the word “vigilance” to describe the bank’s attitude towards inflation control, pushing the euro lower modestly. It is already a done deal that the ECB will raise rates at least once on its October policy meeting.
Earlier, US ADP report showed the economy added 150k jobs in private sector in June, far more than the forecast of 100k and a reading of 97k in the prior month. The weekly jobless claims came out at 318k, slightly higher than the forecast of 313k. The market will focus on the non-farm payrolls for June to be released by the Labor Department tomorrow morning for more clues on the nation’s labor market.
The European Central Bank kept interest rates unchanged at 4.00% as expected. ECB Governor Trichet did not use the word “vigilance” to describe the bank’s attitude towards inflation control, pushing the euro lower modestly. It is already a done deal that the ECB will raise rates at least once on its October policy meeting.
Market$ Await US Jobs Data
At 4:30 AM UK May Industrial Production m/m (exp 0.3%, prev 0.3%)
UK May Industrial Production y/y (exp 0.3%, prev 0.4%)
UK May Manufacturing Production m/m (exp 0.3%, prev 0.3%)
At 7:00 AM Canada June Unemployment Rate (exp 6.1%, prev 6.1%)
Canada June Jobs-Change (exp 17.0k, prev 9.3k)
At 8:30 AM US June Unemployment Rate (exp 4.5%, prev 4.5%)
US June non-farm payrolls (exp 120k, prev 157k)
US June Avg Earnings (exp 0.3%, prev 0.3%)
Correction: UK industrial & manufacturing production were included in yesterday’s preview but are scheduled for release today.
The major currency pairs consolidated in a narrow range during the quiet Asian session, with the dollar mired near its lows across the board. The greenback continues to struggle near 26-year lows versus the sterling around 2.0124 and creeps closer toward its all-time low against the euro near the 1.36-level.
UK May Industrial Production y/y (exp 0.3%, prev 0.4%)
UK May Manufacturing Production m/m (exp 0.3%, prev 0.3%)
At 7:00 AM Canada June Unemployment Rate (exp 6.1%, prev 6.1%)
Canada June Jobs-Change (exp 17.0k, prev 9.3k)
At 8:30 AM US June Unemployment Rate (exp 4.5%, prev 4.5%)
US June non-farm payrolls (exp 120k, prev 157k)
US June Avg Earnings (exp 0.3%, prev 0.3%)
Correction: UK industrial & manufacturing production were included in yesterday’s preview but are scheduled for release today.
The major currency pairs consolidated in a narrow range during the quiet Asian session, with the dollar mired near its lows across the board. The greenback continues to struggle near 26-year lows versus the sterling around 2.0124 and creeps closer toward its all-time low against the euro near the 1.36-level.
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