NFP boosts the Buck

Friday ended with the Greenback making gains against its major counter-parties after a strong payrolls figure was released. Although the unemployment rate remained at 4.9%, it disappointed slightly, with expectations were for the gauge to drop to 4.8%. The headline NFP reading surpassed the forecasted 180k figure with employment gains rising to 255k. With Average Earnings also increasing by 0.3%, the US economy is now showing renewed vigour at the start of Q3. This follows the gains in the labour market seen for June and now July. As labour data is one of the Fed’s leading indicators of monetary policy plans, this broad base increase of labour could add weight for the Fed to raise rates at least once this year.

Monday 

Today will be a slow start to the week, with no high tier data releases. This morning, Germany posted their monthly industrial figure, which fell slightly under the forecasted figure of 0.9% to 0.8%. The remainder of the day will also be quiet on the economic front, which gives the markets time again to digest last week’s BoE actions and the bullish labour data seen from the US.

Tuesday 

The UK Manufacturing and Industrial Production monthly figures will be released, with the manufacturing figure expected to rise to a zero reading from the disappointing -0.5% figure seen in the previous month. Likewise, Industrial Production is expected to register a better reading than the -0.5% seen previously. Before the UK markets open, China the world’s second largest economy, will post their yearly inflation figure where prices are expected to see a decrease to 1.7% from 1.9% 

  • China CPI y/y
  • UK Manufacturing Production m/m
  • UK Industrial Production m/m

Wednesday 

There will be further insight into the US labour market when the Jolts job openings gauge will be released early afternoon. After a positive payroll figure was seen on Friday, a slight increase is also expected to be seen here.  Also from the US, the Crude Oil Inventories will be released, which measures the change in the number of barrels of oil held by commercial firms. With oil prices still low, this will give insight into the demand of oil in the US. 

  • US Jolts Job openings
  • US Oil Inventories
  • NZD Rate statement

Thursday 

This will be another slow day as no market moving data is set for release. The weekly unemployment figure will be released from the US. Later in the evening, New Zealand will release their quarterly Retail Sales figure. Sales are set to increase from 0.8% up to 1%. 

  • US Weekly Unemployment claims
  • New Zealand Retail Sales q/q

Friday

The week ends with more risk events being released. Markets will be focused on China in the early hours of the morning with the release of the Industrial production gauge. The consensus is for this reading to remain constant at 6.2%. However, the slowdown in China has weighed on global growth as their demand slows. Markets will watch this figure for further insight into the world’s second largest economy. From the single currency zone, we receive Germany’s Q2 GDP report first, where growth is due to drop to 0.3% from 0.7%. This is then followed by the main Euro Q2 GDP second reading and growth is expected to remain at 0.3%. In the afternoon, the US will release their monthly Retail Sales figure which is expected to fall to 0.34% from the previous 0.6% reading. 

  • China Industrial Production y/y
  • Germany Prelim Q2 GDP
  • Euro Second reading Q2 GDP
  • US Retail Sales m/m
  • US Prelim UoM Consumer Sentiment