Forex: Daily outlook: US unemployment expected to fall

on Jul 5, 2013


Yesterday the ECB announced that its cash interest rate is to stay unchanged at the current level of 0.50 percent. At the subsequent press conference, ECB Governor Mario Draghi stated that quantitative easing would continue as long as needed and that interest rates would not rise and could even be lowered as conditions required. Afterwards the euro sank by more than one percent.

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A report on France’s May trade balance, due out today at 07.45 BST, is expected to match the prior month at a €4.5 billion deficit.
At 11.00 BST data on German factory orders m/m is expected to show a rise by 1.3 percent in May, compared to the prior 2.3 percent drop.
From the US, 13.30 BST will see reports on non-farm employment change (forecasted to rise by 163,000 in June, compared to the previous growth by 175,000), unemployment (anticipated to decline to 7.5 percent in June from the prior 7.6 percent) and average hourly earnings m/m (expected to incline by 0.2 percent in June, compared to the prior zero change).

Yesterday the Bank of England announced that its cash rate and asset purchase facility were to stay at the current levels, respectively 0.50 percent and £375 billion. New BoE governor Mark Carney stated at a press conference that economic recovery is on the way and that annual inflation is on track to decrease to the targeted two percent.

Carney added that the BoE may not decrease the easing programme as early as investors might be expecting, given the less than convincing economic data. After release of the decisions, the GBP/USD stalled at 1.5025.
No significant economic releases are scheduled to come out from the UK today.
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Japan’s Leading Indicators came out at 06.00 BST today, showing a rise to 110.5 percent in May from the prior 107.7 percent (revised up from 99.3 percent). Analysts had expected a drop to 96.3 percent.
The Nikkei 225 closed today 2.08 percent up, adding 291.04 points to be at 14,309.97.
From Australia at 00.30 BST today, came the AIG construction business index for June, which showed a rise to 39.5 points from the previous 35.3.
Yesterday LME copper prices rose $1.50 per metric tonne to $ 6920.5/MT. Aluminium was off 0.4 percent to be at $1767.5/MT.
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Statistics Canada will today at 13.30 BST release its latest readings on employment change and the unemployment rate. The first indicator is expected to show a drop by 4,200 in June, compared to the prior month’s rise of 95,000. Unemployment is expected to match May’s 7.1 percent.
At 15.00 BST the Richard Ivey School of Business is due to report on Canada’s June PMI, with expectations for a fall to 59.6 points from May’s 63.1.
The Swiss national bank is announcing about now the country’s foreign currency reserves for June. The prior period stood at CHF441.1 billion, revised from CHF441.4 billion.
Shortly afterwards, the Swiss Federal Statistics Office is scheduled to report on June’s CPI m/m, with expectations for a drop by 0.1 percent, compared to the prior period increase of the same amount.


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