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Mixed US employment numbers split economists’

  • UK Construction PMI: 58.1
  • US Non-Farm Employment Change: 223K
  • US Unemployment Rate: 5.3%
  • US Unemployment Claims: 281K
  • AUD Retail Sales m/m: 0.3%

A host of labour data figures were keenly watched yesterday afternoon, but all except the overall unemployment rate failed to live up to the anticipation.  The most watched indicator was the non-farm employment reading, with expectations set high after the bullish ADP figure posted Tuesday, the actual employment number fell short of the forecasted 231k, registering still above the 200k but only at 223k.  On average the increase in employment over the last 12 months has been 250k and with this continued production of 200k plus monthly jobs, it is still proving that the US economy continues to rebound from the disappointing first quarter growth.  Unemployment claims also disappointed with an additional 281k filing for unemployment, slightly exceeding the expected 271k.  However, the surprise was seen in the actual unemployment rate which dropped to 5.3% from 5.5%, which is now the lowest since April 2008.   On balance this will not dissuade the Fed from its current policy based on these figures alone and a rate rise could still be on the cards come September.

Construction PMI was a bullish figure from the UK yesterday, the number exceeded expectations and posted a bullish 58.1.  Accelerating at its fastest pace since February, confidence in this sector over the coming 12 months is said to be at its highest for 11 years.  With increased investment spending and rising demand for new residential projects, construction firms are expecting to see a rise in their activity.  As a result the pound gained ground against the dollar and euro as the economy in the UK continues to push in the right direction.

  • Spanish Services PMI
  • UK Services PMI
  • EUR Retail Sales m/m

Liquidity is expected to be lighter today as the eve of the 4th July US holiday takes place, price action therefore surrounding the greenback could be more volatile due to today’s low liquidity.  In term of headlines, the talk of Greece before the referendum vote on Sunday will continue, but with no more discussions to be had from its creditors until the results of the referendum have been published, this will not affect the single currency until then.  From the UK the Services PMI figure is released this morning and will be heavily monitored by economists’ as the sector contributes around 80% of the GDP.