Thu, Jul 2 2009, 06:48 GMT
by Saxo Bank Strategy Team
Saxo Bank | View company's profile
ECB Rate Announcement also on tap – no change expected though
US Jun ADP Hirings out at -473k vs. -363k expected and revised -485k prior
US Jun ISM Manufacturing Index out at 44.8 vs. 44.9 expected and 42.8 prior
US May Pending Home Sales out at +0.1% m/m vs. flat expected and revised +7.1% prior
US May Construction Spending out at -0.9% m/m vs. -0.6% expected and revised +0.6% prior
AU May Trade Balance out at –A$556 mln vs. –A$125 mln expected and revised –A$282 mln prior
NZ ANZ Jun Commodity Price out at +0.2% vs. revised +2.8% prior
Swiss SNB’s Jordan speaks
Denmark Unemployment (0730)
Sweden Riksbank Rate Announcement (0730)
Norway Unemployment (0800)
UK BOE’s Besley speaks (0825)
UK PMI Construction (0830)
UK BOE’s Miles speaks (0830)
Swiss SNB Quarterly Bulletin (0900)
EU PPI (0900)
EU Unemployment (0900)
EU ECB Rate Announcement (1145)
US Non-farm Payrolls (1230)
US Unemployment Rate (1230)
US Jobless Claims (1230)
US Factory Goods Orders (1400)
Market Comments:
The dollar was already on the back foot as the European session got under way following extremely dovish comments from Fed’s Janet Yellen. European PMI data also seemed to favour the respective currencies over the greenback, with EU PMI at 42.6 vs. 42.4 expected while UK PMI rose to 47.0 from 45.4 the previous month. Sweden reported a sharp turnaround as well, with the PMI jumping into expansionary territory above 50.
As the US session kicked off, Challenger layoffs fell for the fifth straight month and the dollar continued its downward path, even though a sharply worse than expected ADP employment report attempted to spoil the party. The market was expecting a promising fall of just -363k, but in the end the number came out at -473k in June. After a brief respite, the dollar continued lower and easily shrugged off news that the IMF have recommended they issue no more than $150 bln in debt to increase its resources.
The US equivalent of PMI readings, the manufacturing ISM, appeared to impress in the headlines as it rose to 44.8 from 42.8 previously. However, new orders slipped back in to contraction (49.2) and the employment component remained in heavy negative territory (40.7 even after a 6.5 point rise from last time).
The dollar’s weakness was cemented following reports that China wanted to bring the topic of an alternative reserve currency to the dollar up at next week’s G8 meeting. However, subsequent comments from China’s Vice Foreign Minister suggested that no such moves had been made and that the dollar is the main global reserve currency.
The reaction to this headline was decidedly muted in Asia, with traders still willing to embrace risk ahead of the ECD meeting and the non-farm payrolls later.
On this note, yesterday’s worse than expected ADP report may instill additional caution ahead of the figures. Latest polls suggest the market is looking for a loss of 360k jobs in June, but we feel the risk is that we could see a number closer to, or even above, the 400k mark.
The ECB is expected to leave rates unchanged and affirm that its current stance is appropriate, likely suggesting that we keep status quo for a few more months. It will likely give itself a pat on the back for the successful 1-year refinancing operation last week and highlight the prospect of its future covered bond purchase programme.
Published on Thu, Jul 2 2009, 06:54 GMT
Saxo Bank
| Smakkedalen 2, DK-2820 Gentofte
http://www.saxobank.com/ | info@saxobank.com
Continued Economic Recovery, Low Inflation by Wells Fargo Investments, LLC
Fri, Mar 19 2010, 19:58 GMT
USD higher, Greek debt worries, India hikes rates by Easy Forex
Fri, Mar 19 2010, 18:04 GMT
EUR/USD: No time for reversal yet by FXstreet.com Independent Analyst Team
Fri, Mar 19 2010, 15:27 GMT
Stock Traders focusing on Quadruple Witching by ForexHound.com
Fri, Mar 19 2010, 14:36 GMT
Discount rate discussions keeping floor under bonds by Interactive Brokers LLC
Fri, Mar 19 2010, 14:29 GMT
employment, indicator, eurusd, nfp, tradebalance, gbpusd, usdchf, usdjpy
[ View All ]Forex: EUR/USD ends week below 1.3550, first time in 10-months
FXstreet.com | Fri, Mar 19 2010, 20:31 GMT
Forex: Cable fell sharply on Friday
FXstreet.com | Fri, Mar 19 2010, 19:19 GMT
Forex: USD/JPY pulls back to 90.35
FXstreet.com | Fri, Mar 19 2010, 18:42 GMT
Indices: FTSE closes with loses, correction
FXstreet.com | Fri, Mar 19 2010, 16:39 GMT
Forex: EUR/USD finds support at 1.3500
FXstreet.com | Fri, Mar 19 2010, 16:24 GMT
employment, indicator, eurusd, nfp, tradebalance, gbpusd, usdchf, usdjpy
[ View All ]GET CASH BACK FOR YOUR TRADES! Learn more about the Pip Rebate Program