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Dark clouds ahead?
29 Jul 2016
BOJ underwhelms – JPY soars
29 Jul 2016
PM Bulletin: BOJ look-ahead
28 Jul 2016
AM Bulletin: FOMC leaves rates unchanged
28 Jul 2016
PM Bulletin: Yen swinging wildly on stimulus talk
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AM Bulletin: Fed rate decision and FOMC statement in focus
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PM Bulletin: FOMC look-ahead (and Japanese stimulus talk)
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AM Bulletin: FOMC meeting begins today
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PM Bulletin: EURUSD breaks below 1.1000
25 Jul 2016
Weekly Bulletin: Fed and BOJ in focus
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PM Bulletin: Sterling looking vulnerable again
22 Jul 2016
AM Bulletin: Stocks lower as oil weighs
22 Jul 2016
PM Bulletin: The EURUSD and the ECB
21 Jul 2016
AM Bulletin: ECB rate decision ahead
21 Jul 2016
PM Bulletin: ECB look-ahead
20 Jul 2016
AM Bulletin: Q2 earnings keep markets buoyant
20 Jul 2016
PM Bulletin: A look at the yen
19 Jul 2016
AM Bulletin: More records for US equities
19 Jul 2016
PM Bulletin: Precious metals pull back
18 Jul 2016
Weekly Bulletin: It’s all about stimulus
18 Jul 2016
PM Bulletin: European banks in trouble
15 Jul 2016
AM Bulletin: Sombre mood following Nice atrocity
15 Jul 2016
PM Bulletin: The BoE rate decision
14 Jul 2016
AM Bulletin: All eyes on Bank of England
14 Jul 2016
PM Bulletin: BoE Rate Decision in focus
13 Jul 2016
AM Bulletin: Equities drift lower after record US close
13 Jul 2016
PM Bulletin: Global indices pushing higher
12 Jul 2016
AM Bulletin: Equity rally powers on
12 Jul 2016
PM Bulletin: Fresh record high for S&P500
11 Jul 2016
Weekly Bulletin: The markets called, NFPs answered
11 Jul 2016
AM Bulletin: The calm before the storm; Markets await today’s NFPs
08 Jul 2016
PM Bulletin: Non-Farm Payroll look-ahead
07 Jul 2016
AM Bulletin: As the Fed turns dovish, the markets turn bullish
07 Jul 2016
AM Bulletin: Concerns continue as Sterling touches $1.27
06 Jul 2016
AM Bulletin: Markets open higher, weak UK Construction PMI data removes confidence
05 Jul 2016
Weekly Bulletin: Central Banks react to Brexit vote
04 Jul 2016
AM Bulletin: When Carney speaks, the markets listen
01 Jul 2016
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It’s almost that time again; Nonfarm Payrolls are out tomorrow. Today’s ADP Employment Change figures showed that private firms across the US increased their collective workforces by 172,000; far higher than the 159,000 expected by analysts.

Smaller businesses have driven the rise in payroll gains; firms with fewer than 50 employees taking responsibility for adding 95,000 workers (up from May’s 84,000). Larger firms have been under pressure from a stronger US dollar, hurting exports.

Analysts expect a figure of 175,000, a significant increase from May’s shock figure of 38,000. The NFPs will be a focal point while the Fed considers the health of the labour markets; the weak figures last month were instrumental in in the Fed’s decision to leave rates as they are, according to the minutes of the June policy meeting.

The unemployment rate is expected to tick up to 4.8% from 4.7%, where it unexpectedly fell because of sharp labor market shrinkage.

In addition to highlighting the weak job numbers policymakers also cited the concerns around the EU referendum. In the June policy meeting, which took place before the June 23rd EU referendum, minutes showed unease over the impending poll. Policymakers feel that it would be ‘prudent to wait for additional data on the consequences of the UK vote’.

With the above in mind it seems unlikely that a rate hike will be in the near future, with some analysts suggesting it will be 12 months before there is any realistic chance of a hike. As much as the Fed seem to be dithering and making bold statements on interest rates, on our side of the pond it looks as though there may be a rate cut on the cards as early as next week! SocGen are amongst the banks predicting a 0.25% cut to the base rate, suggesting that the market’s reaction to the vote has encouraged decisions to be made more rapidly.  

The US dollar has weakened as we approach the release of the NFP data, perhaps some nervousness after last month’s shock figure. However, a better than expected result may not strengthen significantly as the rise may be dampened by the market not expecting a rate rise, coupled with the dollar rising on the back of the UK’s leave vote, as opposed to strong economic fundamentals. 

If that wasn’t enough to hold the greenback down, strengthening gold prices and Japanese yen has put the currency under pressure.  The yen has risen for the third day, climbing 0.2% to 101.10 versus the dollar. Sterling has also risen along with the euro against the dollar, so many will be looking for an inline or better-than-expected figure tomorrow.

Goldman Sachs Group and Deutsche Bank reckon that the pound is just getting started with its deterioration, predicting it could sink another 7% to 11% percent this year versus the dollar.

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Posted by Michael Campbell

Category: PM Bulletin

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