Argentina central bank reports capital outflow of $1.67 Bln through 2Q

Good Morning,

- Pause in US Dollar rally

- US Unemployment Rate for July rose for the first time since February this year. Generally, U.S. job growth seen slowing, but remaining solid in July.

- Elaborating on, Employers in the U.S. added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997 and a sign of growing optimism about the economic outlook. The 209,000 advance followed a 298,000 gain in June that was stronger than previously reported, figures from the Labor Department showed on Friday in Washington. The median forecast in a Bloomberg survey of economists called for a 230,000 increase. The jobless rate climbed to 6.2 percent from 6.1 percent in June as more people entered the labor force. Wages and hours were unchanged from June.

- The 209K increase in non-farm jobs was the lowest increase since March this year.

- A two step upgrade to Greece's credit rating by Moody's to 'Caa1'

- The ECB is expected to continue keeping its deposit rates negative during this week's monetary policy announcement. On the same track, The Bank of England is expected to leave its interest rate target unchanged at 0.5% at next week's policy meeting on Thursday.

- The RBA is expected to leave its official cash rate unchanged at next week's policy meeting.

- The Australia Dollar has generated the highest returns among major global currencies in the 6-month period ending 08/01/2014, yielding 7.83%.

- US Economic activity in the manufacturing sector expanded in July for the 14th consecutive month, and the overall economy grew for the 62nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. "The July PMI® registered 57.1 percent, an increase of 1.8 percentage points from June's reading of 55.3 percent, indicating expansion in manufacturing for the 14th consecutive month.

- Portugal's Insolvent Banco Espirito Santo To Be Bailed Out, Existing Equity To Be Wiped Out. We knew it was only a matter of time. Sure enough, following Friday's record collapse in the stock price of Portugal's mega bank after even Goldman decided it had enough and pulled the plug on an equity investment it had made just three short weeks earlier (apparently with zero Due Diligence) following massive losses, and whose failure even Portugal's president Silva finally admitted could be a systemic event, the local Diario Economic reports that Banco Espirito Santo is about to be nationalized, i.e. bailed out.

- Growth in China's services sector slipped to a six-month low in July as new orders rose at their weakest rate in at least a year, data showed, taking some of the shine off an industry that has been a bright spot in the Chinese economy this year.

- Argentina central bank reports capital outflow of $1.67 Bln through 2Q

- Both Fed's Fisher and Plosser were beating the hawkish drum on Friday. But neither a voter next year.

- Lastly, geopolitical events continue to have potential to roil markets. The Portugal bank woe and the Argentina default are seen as isolated events. As tragic as then events in the Middle East, it too is seen as contained. Israel appears to have signaled its four-week old offensive may be winding down. In terms of immediate market impact, the Ukraine/Russia situation, which has not yet stabilized, appears to be the greatest risk.

- Major news for the week ahead: There are four major central banks that meet in the week ahead, RBA, BoE, ECB and BoJ. They are unlikely to be instrumental in the shaping the price action.

Have a nice Week!