Market Roundup
- US Non-Farm Payrolls Jul +215k, f/c 223k, +231k-previous.
- US Private Payrolls Jul +210k, f/c 215k, +227k-previous.
- US Avg Workweek Hours Jul 34.6h, f/c 34.5h, 34.5h-previous, may lead to higher wages.
- China CB: to keep financial system stable prevent systemic risks, to increase keeping monetary policy appropriate.
- Bundesbank's Ulbrich: ECB should look through oil slump even as inflation falters.
- SNB's Zurbruegg: Negative Swiss rates on hold despite franc dip.
- Greece says expects to pass bailout in parliament on Aug 18 (Govt spokeswoman).
- Brazil IPCA Inflation IDX YY Jul 9.56%, f/c 9.52%, 8.89%-previous, Higher inflation may push BCB to restart hikes.
- Mexico 12-Month Inflation Jul 2.74%, f/c 2.75%, 2.87%-previous.
- Allianz's El-Erian: September Fed rate hike not a done deal.
Looking Ahead - Economic Data (GMT)
- Aug 8 02:00 China Exports YY* Jul f/c -1%, 2.8%-previous
- Aug 8 02:00 China Imports YY* Jul f/c -8%, -6.1%-previous
- Aug 8 02:00 China Trade Balance USD* Jul f/c 53.25b, 46.54b-previous
- Aug 9 02:00 China PPI YY* Jul f/c -5%, -4.8%-previous
- Aug 9 02:00 China CPI YY* Jul f/c 1.5%, 1.4%-previous
- Aug 9 02:00 China CPI MM* Jul f/c 0.3%, 0%-previous
- 23:50 Japan Bank Lending YY Jul 2.5%-previous
- 23:50 Japan Current Account NSA JPY* Jun f/c 773.6b, 1880.9b-previous
- 05:00 Japan Consumer Confidence Index* Jul 41.7-previous
- 06:00 Japan Economy Watchers Poll* Jul 51-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is supported around 1.0850 levels and currently trading at 1.0960 levels. It has made session high at 1.0979 and lows at 1.0852 levels. The euro initially slipped against the greenback from 1.0930 to 1.0860 to hit daily lows, after US payroll data was released, by US Labor Department. But later, the euro gained all the lost ground against the US dollar, as investors pared back bullish bets on the greenback following a solid U.S. jobs report. The U.S. Labor Department said employers added 215,000 jobs in July, slightly below forecast of 223,000 jobs, but the unemployment rate held at a seven-year low of 5.3 percent and there were signs that wages were beginning to pick up. The outlook though for a September rate increase by the Federal Reserve remained intact. Meanwhile, Greece government's spokeswoman said on Friday, that Greece expects the third bailout it is negotiating with its international lenders to be passed by parliament on August 18, in time to secure funds to cover a key payment to the European Central Bank. Athens is negotiating with European Union institutions and the International Monetary Fund for up to 86 billion euros ($94 billion) in fresh loans to stave off economic collapse and stay in the euro zone. To the upside, immediate resistance can be seen at 1.0970. To the downside, immediate support level is located at 1.0915 levels.
GBP/USD is supported around 1.5425 levels and currently trading at 1.5490 levels. It has made session high at 1.5545 and low at 1.5500 levels. Sterling fell to a three-week low Friday, on track for its biggest weekly loss against the dollar since late May, as expectations of an interest rate hike by the Bank of England were pushed back to the first quarter of dollar was also buoyed by U.S. jobs data, which more or less came in line with expectations, and kept alive the chances of a an interest rate rise by the Federal Reserve in September. The Sterling fell from 1.5530 to hit three week low at 1.5442 levels. Later the Sterling recovered some losses to trade at 1.5490. The BoE Minutes on Thursday showed just one policymaker voted for higher interest rates at the BoE's August meeting, when the bank also warned the strong currency and weak energy prices would keep inflation subdued well into next year. Many in the market had speculated that at least two members of the bank's policy committee would vote for a hike. To the upside, immediate resistance can be seen at 1.5525. To the downside, immediate support level is located at 1.5468 levels.
USD/JPY is supported around 124.00 levels and currently trading at 124.20 levels. It has made session high at 125.07 and low at 124.08 levels. The pair edged higher immediately from after US jobs data was released by The U.S. Labor Department 124.60 levels to hit weekly high at 125.07 levels. But, later in early afternoon the dollar slipped from 124.75 levels to hit daily lows at 124.09, as investors closed there short buy position and sold off the greenback against Japanese yen. The pair was trading in the Late New York session around 124.23 levels. Meanwhile, The U.S. Labor Department said employers added 215,000 jobs in July, slightly below a forecast of 223,000 jobs, but the unemployment rate held at a seven-year low of 5.3 percent and there were signs that wages were beginning to pick up. The prospect of higher U.S. interest rates has made the dollar significantly more attractive to investors in the past year which in turn has lowered demand for commodities and crimped U.S. corporate earnings from exports. To the upside, immediate resistance can be seen at 124.50. To the downside, immediate support level is located at 124.00 levels.
USD/CAD is supported around 1.3045 levels and currently trading at 1.3134 levels. It has made session high at 1.3182 and low at 1.3045 levels. The Canadian dollar weakened against its U.S. counterpart on Friday as employment reports from both countries kept their divergent monetary policy paths on track. The loonie, as Canada's currency is colloquially known, has lost almost 10 percent of its value since May. The central bank has cut rates twice this year as a plunge in the price of oil batters the country's energy industry. The Canadian economy added 6,600 jobs in July, above the average forecast of economists, but the number of full-time jobs declined. U.S. employment rose at a solid clip in July and wages rebounded after unexpectedly stalling in the prior month, signs of an improving economy that could open the door to a Federal Reserve interest rate increase in September. Just ahead of US job data the dollar slipped to hit daily lows at 1.3045 against loonie, after the payrolls data dollar gained back some losses to trade at 1.3134 levels. To the upside, immediate resistance can be seen at 1.3160. To the downside, immediate support level is located at 1.3100 levels.
Equities Recap
European stocks closed lower on Friday, after disappointing German industrial production figures and slightly better US employment data. UK's benchmark FTSE 100 closed lower by 0.3 percent, the pan-European FTSEurofirst 300 closed, down by 0.9 percent, Germany's Dax closed down by 0.8 percent, France's CAC closed down at 0.7 percent, Italy's FTSE MIB closed down by 0.5 percent. Meanwhile, Spain's IBEX 35 was down by 0.6 percent at close.
U.S. stocks closed lower on Friday, after US Nonfarm data which came close to forecast figures. Dow Jones closed down by 0.26 percent, S&P 500 closed down by 0.27 percent, Nasdaq closed down by 0.23 percent.
Treasuries Recap
U.S. short-dated Treasuries yields rose slightly while longer-dated yields fell on Friday after data showed U.S. employment rose at a solid clip in July, reinforcing expectations that the U.S. Federal Reserve will raise interest rates in September.
U.S. 30-year yields hit 2.82 percent, their lowest level in over three months. The yield looked set for its biggest one-day decline in about a month. The yield spread between five-year and 30-year Treasuries was at 125 basis points after the data, marking the tightest spread since April. Bond yields move inversely to prices.
U.S. 30-year bonds were last up 1-22/32 in price to yield 2.82 percent, from 2.91 percent late Thursday.
Benchmark 10-year notes were last up 17/32 in price to yield 2.17 percent, from a yield of 2.23 percent late Thursday.
Commodities Recap
Gold rose on Friday as investors assessed U.S. non-farm payrolls data that may indicate the Federal Reserve will delay an immediate interest rate hike, but was still on course for a weekly fall.
Spot gold which hit a session low of $1,082.76 an ounce immediately after the U.S. jobs report, managed to rebound 0.5 percent to $1,094.54 by 2:31 p.m. EDT (1831 GMT). It had fallen to $1,077 on July 24, its weakest since February 2010.
U.S. gold for December delivery settled up 0.4 percent at $1,094.10 an ounce.
Crude oil dipped on Friday, plumbing multi-month lows and heading for a sixth straight week of losses, as the approaching end of the U.S. summer driving season suggested a growing surplus in gasoline supply.
Brent settled down 91 cents, or 1.8 percent, at $48.61 a barrel on Friday, after touching a more than six-month low of $48.45.
U.S. crude closed down 79 cents, or 1.8 percent, at $43.87, after hitting a more than four-month session low of $43.80.
Gasoline hit a 5-1/2-month low on Friday. It tumbled 12 percent on the week, its sharpest weekly loss in almost six years. Ultra-low-sulfur diesel fell nearly 3 percent on the week after hitting a six-year bottom on Wednesday.
