Jobs and Core PCE Data in Focus

Economic Data

- (EU) ECB: Eight banks to repay total €3.2B in 3-Year LTRO Funds vs. €3.5Be
- (RU) Russia July Sovereign Wealth Fund Balances: Reserve Fund: $86.6B v $87.3B prior; Wellbeing Fund: $86.5B v $87.9B prior
- (IN) India Forex Reserves w/e July 18th: $ v $317.9B prior
- (BR) Brazil Jun Industrial Production M/M: -1.4% v -2.3%e; Y/Y: -6.9% v -7.9%e
- (CZ) Czech July Budget Balance (CZK): +4.5B v +1.5B prior
- (US) July Change in Nonfarm Payrolls: +209K v +230Ke; Change in Private Payrolls: +198K v +227Ke; Change in Manufacturing Payrolls: +28K v +15Ke
- (US) July Unemployment Rate: 6.2% v 6.1%e; Underemployment Rate: 12.2% v 12.1% prior; Change in Household Employment: +131K v +407K prior; Labor Force Participation Rate: 62.9% v 62.8% prior
- (US) July Average Hourly Earnings M/M: 0.0% v 0.2%e; Y/Y: 2.0% v 2.2%e; Average Weekly Hours: 34.5 v 34.5e
- (US) Jun Personal Income: 0.4% v 0.4%e; Personal Spending: 0.4% v 0.4%e
- (US) Jun PCE Deflator M/M: 0.2% v 0.2%e; Y/Y: 1.6% v 1.7%e
- (US) Jun PCE Core M/M: 0.1% v 0.2%e; Y/Y: 1.5% v 1.4%e
- (BR) Brazil July Manufacturing PMI: 49.1 v 48.7 prior
- (CA) Canada July RBC Manufacturing PMI: 54.3 v 53.5 prior
- (US) July Final Markit Manufacturing PMI: 55.8 v 56.5e
- (US) July Final University of Michigan Confidence: 81.8 v 81.8e
- (US) July ISM Manufacturing: 51.7 v 56.0e; Prices Paid: 59.5 v 56.0e
- (US) Jun Construction Spending M/M: -1.8% v +0.5%e

- Trading is pretty choppy this morning as participants evaluate the July jobs and PCE inflation data, but yesterday's overall slide lower has been arrested. As of writing the DJIA is down 0.15%, the S&P500 is flat and the Nasdaq is down 0.20%.

- The July US jobs report was not quite as strong as expected, however by any measure the employment situation remains headed in the right direction. Non-farm payrolls were up by 209K, less than expected and below June's 288K figure. Payroll gains averaged 277K for the second quarter and 230K for the first half of 2014, and today's number makes for the longest 200K+ streak of payroll gains since the mid-1990s. Average hourly earnings were unchanged, leaving the y/y rate at 2.0%, too slow to contribute to higher inflation for now. Indeed, July PCE core inflation remains stuck at 1.5% for the third consecutive month.

- The Philly Fed's Charles Plosser released a statement this morning explaining his dissent in this week's FOMC decision. According to Plosser, the job market has improved more rapidly than expected yet the Fed hasn't shifted course. Plosser felt the FOMC's language was an inappropriate characterization of the future path of policy and could limit flexibility going forward. On CNBC earlier, the Dallas Fed's Richard Fisher said that despite his opposition to some Fed policies, he felt the debate within the committee had shifted in his direction, especially given the FOMC statement language that inflation was moving closer target. Fisher said that the data continues to improve, the Fed could raise interest rates as soon as early 2015.

- General Motors, Ford and Chrysler all reported another very strong month of sales gains in July. Ford and GM sales gained 10% and 9.4%, respectively, while Chrysler sales were up 20% y/y. Ford's truck sales recovered from June's slide lower, and GM's inventory fell. A GM sales executive said strong sales should continue through the balance of the year, with plenty of pent-up demand for trucks and SUVs. Shares of GM and Ford are flat on the day.

- Much like Conoco and Exxon yesterday, Chevron beat top- and bottom-line expectations thanks to higher oil prices in the quarter, while production declined slightly. The firm's downstream earnings were lower y/y. Shares of CVX are down slightly.

- Momentum names Tesla and LinkedIn moved higher in cash trading this morning after beating expectations in earnings reports out last night. LNKD is up 10%, while TSLA peaked at +5% then lost some ground.

- Consumer names Clorox and Proctor & Gamble both reported fourth quarter results and initial FY15 guidance this morning. PG is up 4% thanks to good earnings and a strong FY15 forecast. Clorox's result was more muted, and the firm warned FY15 revenues would be flat. CLX is up 1.5%.

Looking Ahead

- (SK) Slovakia Sovereign Debt Rating published by S&P, Moody's
- (GR) Greece Sovereign Debt Rating May Be Published by Moody's
- (IT) Italy July Budget Balance: No est v €7.7B prior
- 12:00 (IT) Italy July New Car Registrations Y/Y: No est v 3.8% prior
- 13:00 (MX) Mexico July IMEF Manufacturing Index: 50.9e v 50.3 prior; Non-Manufacturing Index: 50.5e v 50.3 prior
- 14:00 (BR) Brazil July Monthly Trade Balance: $0.8Be v $2.4B prior; Total Exports: $23.3B v $20.5B prior; Total Imports: $22.4Be v $18.1B prior
- 17:00 (US) July Domestic Vehicle Sales: 13.20Me v 13.25M prior; Total Vehicle Sales: 16.70Me v 16.92M prior