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America's Roundup: Dollar gains after jobs report shows a stronger-than-expected rise in June, Wall Street eases, Gold slips, Oil prices rise on Iran tensions, OPEC output cuts-July 6th,2019

Market Roundup

• US Jun Non-Farm Payrolls, 224k, 160k forecast 72k previous.

• US Jun Unemployment Rate, 3.7%, 3.7% forecast 3.7% previous.

• US Jun Private Payrolls, 191k, 153k forecast 83k previous.

• US Jun Average Earnings m/m, -0.2%, 0.3% forecast, 0.3% previous.

• US Jun Average Earnings y/y, -3.1%, 3.2% forecast, 3.1% previous.

• US Jun Unemployment Change, 3.7k, 3.6k forecast 3.6k previous.

• CA Jun Employment Change, -2.2k, 10.0k forecast 27.7k previous.

• CA Jun Unemployment Rate, 5.5%, 5.5%, forecast, 5.4% previous.

• CA Ivey PMI 52.4, 55.0 forecast, 55.9 previous.

Looking Ahead - Economic Data (GMT)

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Currency summaries

EUR/USD: The euro slipped lower against the U.S. dollar on Friday, after data showed that U.S. job growth rebounded strongly in June. On-farm payrolls increased by 224,000 jobs last month, the most in five months, and well above the 160,000 jobs forecast by economists. The strong gains came after job growth slowed sharply in May. The economy created 11,000 fewer jobs in April and May than previously reported, the government said on Friday. The data came as many traders and investors were away, a day after the July 4 holiday and ahead of the weekend. The euro was down 0.53  percent at $1.1224. An index that tracks the dollar versus a basket of six major currencies was up 0.56 at 97.26. Immediate resistance can be seen at 1.1268 (5 DMA), an upside break can trigger rise towards 1.1321 (10 DMA).On the downside, immediate support is seen at 1.1200 (Psychological level), a break below could take the pair towards 1.1181 (June 18th low).

GBP/USD: Sterling declined against the dollar on Friday, as poor economic data and a rise in expectations that the Bank of England will cut interest rates weighed on sterling. This week, investors decided the Bank of England will not be immune from the pressure to ease and are now pricing in a rate cut over the next 12 months relatively dovish comments from Governor Mark Carney during the week heightened such expectations. Added to that, weak purchasing managers’ index surveys suggested the British economy may have contracted in the second quarter, underlining economic fragility amid prolonged uncertainty about how and when Britain will leave the European Union. A stronger dollar also weighed on the British currency. Immediate resistance can be seen at 1.2646 (11 DMA), an upside break can trigger rise towards 1.2700 (Psychological level).On the downside, immediate support is seen at 1.2480(Daily low), a break below could take the pair towards 1.2459 (23.6 % retracement level).

USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday, pulling back from an eight-month high the day before, as the greenback broadly climbed and after data showed a surprise drop in Canadian jobs in June. Canada’s economy shed a net 2,200 jobs in June after two months of gains, but wages jumped by the most in more than a year - a sign of strength analysts said ruled out the chances of the Bank of Canada cutting interest rates next week. At   (1927 GMT), the Canadian dollar was trading 0.25% lower at 1.3078 to the greenback. Immediate resistance can be seen at 1.3085 (Psychological Level), an upside break can trigger rise towards 1.3118 (11 DMA).On the downside, immediate support is seen at 1.3029 (38.2 % retracement level), a break below could take the pair towards 1.2930 (23.6 % retracement level).

USD/JPY: The dollar strengthened against the Japanese yen on Friday, as upbeat US jobs data supported greenback. The U.S. Labor Department data showed nonfarm payrolls rose by 224,000 jobs in June, the most in five months, and solidly beating economists' expectation of 160,000 additions. The jobs report also pointed to persistent moderate wage gains and mounting evidence that the economy was losing momentum, which could still encourage the Fed to cut rates this month. Traders lowered their expectations of a 50 basis point rate cut by the Fed at its policy meeting on July 30-31, although hopes remained high that the central bank would start easing monetary policy.The dollar was 0.50 percent higher versus the Japanese yen at 108.50. Strong resistance can be seen at 108.66 (38.2 % retracement level), an upside break can trigger rise towards 109.12 (23.6 % retracement level).On the downside, immediate support is seen at 108.29 (50 % retracement level), a break below could take the pair towards 107.91 (61.8% retracement level).

Equities Recap

European shares broke a six-day winning streak on Friday as poor German data and a downbeat outlook from Sweden’s Hexagon weighed, and losses deepened after strong U.S. jobs data saw investors trimming bets of an aggressive rate cut by the U.S. Federal Reserve this month.

UK's benchmark FTSE 100 closed down by 0.66 percent, Germany's Dax ended down by 0.49 percent, France’s CAC finished the day down by 0.48 percent.

U.S. stocks fell on Friday, slipping from record levels hit in the previous session, as strong U.S. job growth in June pushed investors to scale back bets on aggressive interest rate cuts by the Federal Reserve.

Dow Jones closed down by 0.15 percent, S&P 500 ended down 0.16 percent, Nasdaq finished the day down by 0.10 percent.

Treasuries Recap

U.S. Treasury yields rose across the board on Friday, after data showed the world's largest economy created far more jobs than expected in June, suggesting that the Federal Reserve would not have to be aggressive in cutting interest rates at this month's monetary policy meeting.

U.S. benchmark 10-year yields rose to a more than one-week high, while 2-year yields climbed to a two-week peak after the jobs report.

Commodities Recap

Brent oil ticked higher on Friday, supported by tensions over Iran and the decision by OPEC and its allies to extend a supply cut deal until next year, while U.S. benchmark crude prices fell on weak economic indicators.

Brent  was up 1.64 cents at $64.89 per barrel by 1950 GMT. U.S. West Texas Intermediate (WTI)   gained to $57.57.

Gold prices edged lower on Friday as the dollar gained after the release of U.S. jobs data.Spot gold was 1.03% lower at $1,400.13 an ounce by   (1958 GMT). U.S. gold futures were down 0.4% at $1,396 an ounce.

 

By Srikanth G
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