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Sterling falls to three week low

Last week ended with a bombshell as the Non-Farm figure massively disappointed by adding only 38,000 jobs in May. The overall unemployment rate dropped to 4.7% from 5%, showing a contrast in data. This was far from the expected figure of 168k jobs in May which saw the Greenback lose ground against all currencies. This is the lowest job gains figure for the US in nearly 5 years. As a result, it has thrown the expectations of the Fed next raising interest rates off the table for June and now July.  Markets will look for further guidance and insight from Fed Chair, Janet Yellen later today to see whether this trend will continue for the labour markets in future. Janet Yellen is due to speak later today at the World affairs council, where markets will decipher if Friday’s shock figure has amended the Fed’s rate hike expectations, and when the Fed are likely to act.  


This morning saw Sterling fall to a three week low, after two polls from the weekend showed the leave campaign gathering momentum before the EU vote. New polls from ITV showed that the EU leave voters were now in the lead with 45%, which is causing volatility for the Pound. The uncertainty surrounding the Referendum is dampening UK growth for the second quarter and will continue until the vote is released.


No high tier data is released on Tuesday, but we can expect the weekly poll of the Brexit campaign. As last week revealed, the leave and stay voters almost tied, this release will be watched to see what side has the edge and will no doubt impact the Pound.  The Eurozone will release the final reading for GDP Q1 with expectations to remain at the current figure of 0.5%. 

  • Euro GDP Q1 Final reading
  • UK Halifax HPI m/m


China, the world’s second largest economy will come into the spotlight early on Wednesday. Their Trade Balance figure is due for release and forecast to show more goods have been exported than imported. Following this, the UK monthly gauge for Manufacturing Production will hit the wires and is due to remain constant at 0.1% for May. After the disappointing NFP figure on Friday, the US will provide another look at their labour market with the release of the Jolts Job Openings. This will be watched to see if it increases to 5.82m as forecast, or if the figure will disappoint again. Later in the evening, New Zealand Central Bank will release their interest rate and policy statement, where a cut from 2.25% to 2% is expected. 

  • China Trade Balance
  • UK Manufacturing Production m/m
  • US Jolts Job Openings
  • NZD official Rate Decision and Statement


Further insight into China’s economy will be seen as they post their yearly inflation figure which is expected to remain at 2.3%. At 8am the head of the ECB Mario Draghi will speak in Brussels at the Economic Forum, this will be the biggest event of the day. All will look for any clues that Draghi may give on any further stimulus plans from the ECB, or comments on how Brexit concerns are affecting the European Central Bank. From the US, the weekly Unemployment claims figure is released but has little effect on the markets. 

  • China CPI y/y
  • Euro ECB President Draghi Speaking
  • US Unemployment Claims


The week closes with no high tier data releases. Germany, the powerhouse of the single currency zone, will post their monthly inflation figure which is expected to remain at 0.3%. The UK’s monthly Construction Output is expected to increase to a positive reading of 1.5% from Aprils -3.6%. Lastly, the US will release the first reading of the University of Michigan Sentiment, where sentiment is due to fall slightly from 94.7 to 94.1. 

  • German Final CPI mom
  • UK Construction Output m/m
  • US Prelim UoM Consumer Sentiment