Over the weekend, North Korea claimed that it had conducted a test of a hydrogen bomb meant to be carried by a long-range missile. The hydrogen bomb, said to have been tested, is seven times more powerful than the bomb that destroyed Hiroshima. The test has been addressed by world officials with Chinese President Jingping warning that “a dark shadow is looming over the world”. US President Donald Trump was asked if he would attack the North, which he responded with “we’ll see”. With the latest test and comments from world leaders, markets have reacted with a risk of sentiment turning to the Japanese Yen and Gold.
Across the pond, the Greenback slipped after poor Labour Data releases, registered worse than expected. The biggest piece of data last week; Non Farm Payrolls from the US, failed to meet expectations of 180k, posting a worse than expected 156k. Adding to the raft of bearish Labour Data were Average Earnings at 0.1% and Unemployment which ticked up to 4.4%. Overall, a bearish set of Labour Data Figures from the United States. However, markets still believe it will not be enough to derail the Feds plans to raise interest rates this year.
This week will begin fairly quietly, with a light economic docket and both the US and Canada markets closed in observance of Labour Day. The UK released the first of three PMI’s this week. The UK Construction PMI posted a worse than expected 51.1.
The markets will continue to focus on the UK on Tuesday, with the release of the Services PMI and Inflation Report Hearing, expected at 53.6. Australia will be releasing the interest rate and statement from the Reserve Bank of Australia. The Eurozone will release the final version of the Services PMI.
The focus will move to Canada on Wednesday as the Bank of Canada release their interest rate, expected to remain at 0.75% and statement. Australia will be releasing the GDP figure, forecast at 0.8% whilst, the US will be posting their Non-Manufacturing PMI and Final Services PMI.
Thursday is undoubtedly the biggest day of the week as the markets will be watching the highly-anticipated ECB Press Conference. The Euro’s strength seems to be raising concerns and on Thursday the markets could see ECB President, Mario Draghi, step in to weaken the Euro. Across the pond, the weekly Unemployment Claims Figure will be released from the US as well as the Crude Oil Inventories. With the devastating Tropical Storm Harvey hitting Texas, oil refineries have been forced to close, with worries that they could be compromised for weeks rather than days. The price of petrol already jumped last week as the storm struck.
On Friday, the UK will release the Manufacturing Production Figure, expected to post 0.3. From Canada, the Unemployment Rate and Employment Rate will both be released, with the change forecast at 15k, whilst the Jobless Rate is set to remain sticky at 6.3%.