Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Labor Department releases nonfarm payrolls report for the month of June. The report is likely to show 160,000 jobs were added compared with an increase of 75,000 in May.
- (0830 ET/1230 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of June. The rate stood at 62.8 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Labor Department is expected to report that the unemployment rate remained unchanged at 3.6 percent in June.
- (0830 ET/1230 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in June after climbing 0.2 percent in the month before.
- (0830 ET/1230 GMT) Statistics Canada releases the employment report for June. The economy probably added 10,000 jobs, compared to a rise of 27,700 jobs in May, while the participation rate came in at 65.7 percent in the previous month.
- (0830 ET/1230 GMT) Canada's unemployment rate is expected to rise 5.5 percent in June from 5.4 percent in May.
- (1000 ET/1400 GMT) The Richard Ivey School of Business releases Canada's seasonally adjusted Ivey Purchasing Managers Index for the month of June. The index is likely to decline to 55.0 from 55.9 in the prior month.
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index rallied to a 2-week high, as investors focused on U.S. non-farm payrolls, due later in the day, which are expected to have increased by 160,000 in June compared with 75,000 in May. The greenback against a basket of currencies traded 0.2 percent up at 96.93, having touched a high of 96.97 earlier, its highest since June 20.
EUR/USD: The euro slumped to a 2-week low after German data showed industrial orders declined more than expected in May, followed by a warning from the economy ministry this sector was likely to remain weak in the coming months. The European currency traded 0.2 percent down at 1.1263, having touched a low of 1.1255 earlier, its lowest since June 20. Immediate resistance is located at 1.1327 (38.2% retracement of 1.1412 and 1.1275), a break above targets 1.1360 (61.8% retracement). On the downside, support is seen at 1.1251 (June 7 Low), a break below could drag it below 1.1203 (June 17 Low).
USD/JPY: The dollar surged above the 108.00 handle, as investors eagerly awaited the U.S. jobs data that could stoke or temper market expectations about aggressive policy easing by the Federal Reserve. The pair was trading 0.2 percent up at 107.04, having hit a low of 107.53 on Wednesday, its lowest since Jun. 26. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. nonfarm payroll report, unemployment rate and Fed monetary policy report. Immediate resistance is located at 108.36 (June 4 High), a break above targets 108.80 (June 11 High). On the downside, support is seen at 107.24 (June 24 Low), a break below could take it lower at 106.78 (June 25 Low).
GBP/USD: Sterling plunged to a 2-1/2 week low and was headed for a more than 1 percent drop over the week, weighed down by weak economic data and a rise in expectations that the Bank of England will cut interest rates. The major traded 0.3 percent down at 1.2541, having hit a low of 1.2540, it’s lowest since June 18. Immediate resistance is located at 1.2613 (5-DMA), a break above could take it near 1.2658 (10-DMA). On the downside, support is seen at 1.2531 (June 17 Low), a break below targets 1.2506 (June 18 Low). Against the euro, the pound was trading 0.1 percent down at 89.77 pence, having hit a high of 89.19 on Tuesday, it’s highest since Jun. 25.
USD/CHF: The Swiss franc slightly eased as the greenback gained ahead of the U.S. non-farm jobs report that could influence the course of near-term Federal Reserve policy. The major trades 0.3 percent up at 0.9876, having touched a high of 0.9889 on Tuesday; it’s highest since June 20. On the higher side, near-term resistance is around 0.9920 (June 10 High) and any break above will take the pair to next level till 0.9963 (June 6 High). The near-term support is around 0.9798 (10-DMA), and any close below that level will drag it till 0.0.9738 (June 28 Low).
Equities Recap
European shares plunged, weighed lower by losses in the basic resource and industrial goods & services sectors.
The pan-European STOXX 600 index fell 0.4 percent at 391.33 points, while the FTSEurofirst 300 slumped 0.4 percent to 1,540.85 points.
Britain's FTSE 100 trades 0.2 percent down at 7,592.20 points, while mid-cap FTSE 250 eased 0.4 to 19,721.24 points.
Germany's DAX declined 0.3 percent at 12,599.65 points; France's CAC 40 trades 0.3 percent lower at 5,603.14 points.
Commodities Recap
Crude oil prices surged, supported by tensions around Iran and this week’s decision by OPEC and its allies to extend a supply cut deal until next year. International benchmark Brent crude was trading 0.8 percent higher at $63.59 per barrel by 1024 GMT, having hit a low of $62.06 on Wednesday, its lowest since June 19. U.S. West Texas Intermediate was trading 0.2 percent up at $56.87 a barrel, after falling as low as $56.03 on Wednesday, its lowest since the June 20.
Gold prices declined as the greenback gained ahead of the U.S. jobs data, which could offer guidance on the U.S. Federal Reserve’s upcoming interest rate decisions. Spot gold was trading 0.1 percent down at $1,413.92 per ounce by 1027 GMT, having touched a high of $1,437.66 on Wednesday, its highest since June 25. U.S. gold futures slipped 0.3 percent to $1,416.70 an ounce.
Treasuries Recap
The U.S. Treasuries remained unnerved during the afternoon session, after returning from Independence Day holiday ahead of the country’s June non-farm payrolls and unemployment rate data, scheduled to be released today by 12:30GMT respectively. The yield on the benchmark 10-year Treasury yield remained tad higher at 1.962 percent, the super-long 30-year bond yields traded flat at 2.472 percent and the yield on the short-term 2-year too traded nearly steady at 1.776 percent.
The United Kingdom’s gilts steadied during European session as investors remained side-lined amid a muted session that witnessed data of barely any economic significance to impact the debt market. The yield on the benchmark 10-year gilts, hovered around 0.683 percent, the 30-year yield rose nearly 1-1/2 basis points to 1.324 percent, and the yield on the short-term 2-year too traded tad higher at 0.518 percent
The German bunds remained tad lower during European session amid a muted end to the trading day of this week, which witnessed data of little economic significance. The German 10-year bond yields, which move inversely to its price, rose 1 basis point to -0.389 percent, the yield on 30-year note also gained 1 basis point to 0.208 percent and the yield on short-term 2-year remained flat at -0.752 percent.
The Australian government bonds gained on the last trading day of the week amid a silent Asian session that witnessed data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped nearly 1-1/2 basis points to 1.285 percent, the yield on the long-term 30-year bond edged 1 basis point to 1.934 percent and the yield on short-term 2-year traded tad lower at 0.940 percent.
