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NonFarm payrolls bounce back

NonFarm payrolls bounce back

The Dollar starts the week on solid ground after US Nonfarm payrolls rose 222,000 for June compared with expectations of 180,000. Government jobs provided the bulk of the increase and May’s figure was revised up to 152,000, an extra 14,000.

Unemployment ticked up to 4.4% from 4.3% with a small increase in the participation rate while the number of employed people increased by over 200,000 on the month. Average earnings increased by 0.2%, slightly less than the expected increase of 0.3% and the annual increase was held at 2.5%. The Dollar slipped against the Euro as markets focused on the earnings data, but the Euro hit tough resistance on approach to 1.1440.

The Nonfarm payrolls increase maintained confidence in the labour market, but subdued earnings data increased speculation that the Fed could hold rates at the September meeting. Markets will be looking for Chair Janet Yellen’s testimony on Wednesday and Thursday or further hints on likely policy trends during the second half of 2017.


Sterling dipped against the Dollar on Friday, setting it up for a weekly loss, as market participants moved to the sidelines ahead of data that will provide fresh evidence on whether recent hawkish comments by policy makers are backed by an improving economy.

UK industrial production data failed to bounce back as expected, falling well short of expectations with a 0.1% decline in May. Construction output also declined for the month and the trade deficit was wider than consensus forecasts at GBP11.9bn in May. The fact that the ONS has stopped the practice of pre-releasing the data to government officials heightened the currency impact. The Pound immediately fell to 1.2900 against the Dollar but found support around 1.2870 by late afternoon to prevent further fallout. Against the Euro, Sterling continued to flounder, dropping to 1.1310.

President Trump stated, “trade will be a very big factor between our two countries” when commenting on a US-UK free trade deal. The optimistic rhetoric boosted confidence in the UK outlook to some extent.


With no tier one data, Thursday’s European Central Bank meeting accounts were still the main driver for Euro sentiment. The confirmation that policy makers discussed how to handle tapering, by removing the easing bias from their statement, (not actually when or how to start tapering), was enough to boost the Euro.

Data To Watch:
6:00am EUR Exports (May), Trade Balance s.a. (May), Current Account n.s.a.(May)
2:00pm USD Labour Market Conditions Index (Jun) 
7:00pm USD Consumer Credit Change (May) 
11:00pm GBP BRC Like-For-Like Retail Sales (YoY) (Jun)

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