Nonfarm Payrolls to add to interest rate fever?
The Dollar index, which tracks the Greenback against six major rivals, was down 0.1% yesterday. The index is on track for flat weekly performance, which is not surprising as investors are waiting for the US jobs data due for release later today. The market consensus is for the U.S. economy to have created 164,000 jobs in May, with a strong reading likely to push the Dollar higher as the June interest rate decision approaches.
US Initial jobless claims came in better than expected yesterday, posting 267k against the expected 270k. The ADP Nonfarm Employment Change showed gains of 173k. Although the figure was slightly less than expected, it came in better than the previous month. The data was not market moving, but it does provide a good gauge for today’s release.
GBPUSD opened this morning at 1.4423, a gain of 0.05% for the Pound. The Dollar strengthened against the Euro, with the pair opening this morning at 1.1150.
UK Construction PMI data came in at 51.2 for May, down from 52.0 from the previous month. Unfortunately this keeps up the trend of negative data from the UK, further reinforcing the negative impacts of the upcoming EU referendum. Today, Services PMI is expected to show a slight increase to 52.5. If the negative data trend continues, however, there is a chance for further weakness from Sterling with the potential for referendum uncertainty to compound the effect.
There was no change in European Central Bank (ECB) monetary policy yesterday. The Eurozone interest rates stayed at 0% and Mario Draghi stated they would only ‘act’ if they needed to. As a result, the single currency ended the day slightly weaker at around the 1.2911 levels against the Pound.
Data to watch: 9am EUR May Markit Services PMI and Composite PMI. 9.30am UK May Markit Services PMI. 1.30pm US May Nonfarm Payroll, Unemployment Rate, Labor force participation. 2.45pm US May Markit Services PMI and Composite PMI, Factory Orders & ISM Non-Manufacturing PMI.