Dollar declines on the back of bearish US labour data
The US labour data disappointed markets on Friday, as the headline non-farm payroll posted a bearish 103k, compared to 188k expected. The unemployment rate figure disappointedly remained static at 4.1%, despite the expectations that it would decline to 4%. Average hourly earnings was the only piece of bullish data, increasing to 0.3%,from 0.1% in the last reading. The overall bearish data saw the dollar decline against its major counterparties over the course of the afternoon.
Back in the UK, a new survey conducted by YouGov has suggested the British public would like another referendum on the final Brexit deal. The survey which was commissioned by Best for Britain, a pro remain group, showed 44% of the respondents believe there should be another vote before the UK leaves the European Union. 36% of the survey respondents didn’t want another vote. This survey will add pressure to UK Prime Minister, Theresa May who has previously rejected calls for a second referendum as there wasn’t a decisive majority calling for a second referendum. The UK is due to leave the EU at the end of March 2019 and has less than seven months to meet the EU’s target of reaching a deal by the end of October.
Quiet start to the week, with no high tier data on Monday’s economic docket. From the UK, the Halifax house price index is expected to indicate a small rise in house prices by 0.1%, slower than last month’s increase of 0.4%. Across the pond, the Bank of Canada will be releasing the quarterly business outlook survey.
The Bank of England’s chief economist, Andy Haldane, is due to speak about the role of central banks and societal inequality at the David Finch Public Lecture in Melbourne, with audience questions expected. The US will be releasing month on month PPI figure, which is predicted to come in at 0.1%, a slowdown from last month’s figure of 0.2%. As an indicator of inflation, markets will be looking to see whether the reading supports the Federal Reserve’s plan to tighten monetary policy in the near term.
A busy day on the economic calendar begins with month on month UK manufacturing production, expected to rise from 0.1% to 0.2%. The UK Goods trade balance deficit is expected to improve from last month’s -12.3bn to -11.9bn, indicating either a reduction in imports or a greater number of exports. The ECB president, Mario Draghi will be speaking at the Generation €uro Students’ Award Ceremony, in Frankfurt with audience questions expected. In the afternoon, the US will be releasing CPI month on month, expected at 0.0%, down from last month’s reading of 0.2%. However, the year on year reading is expected to increase to 2.4% from 2.2% previously. Core CPI, which excluding food and energy, is predicted to remain unchanged at 0.2%. In addition, the US will also release the minutes from the FOMC’s latest meeting, providing an in-depth insight into the underlying economic reasons that influenced voting patterns on the latest interest rate decision.
In a day dominated by speeches, the Bank of England’s deputy Governor Ben Broadbent, will begin by speaking at the reserve Bank of Australia. The ECB release their latest monetary policy meeting accounts offering a detailed insight into their view on the current economic situation in the Eurozone and the future of their interest rate decisions. The US Jobless Claims is expected to improve from last week’s 242k down to 231k offering the potential for increased consumer spending. The German Bundesbank president Wiedmann is due to deliver a speech titled "A spirit of optimism in Europe - guidelines for a crisis-proof monetary union" at the Ludwig Erhard Lecture, in Berlin. Later, the BoE Governor Mark Carney, is due to deliver the closing remarks at the Public Policy Forum's growth summit, in Toronto.
A quiet end to the week sees the Preliminary University of Michigan Consumer Sentiment as the only significant data release. The consensus figure is 100.8, down 0.6 from last month’s revised reading of 101.4 indicating a slight reduction in consumer confidence, with the potential to indicate a reduction in consumer spending.