Last Friday, investors had confused reactions for the non-farm payroll report but finally, it ended positively for the dollar. The economy added 222K jobs in June, the highest number in four months, well above market forecast of 179K.
In addition, May’s figure revised upwards, adding to the positive outlook. The unemployment rate picked up slightly to 4.4%, though it is not a big issue as it has been at extremely low levels for a long time; average hourly earnings kept the same pace of growth and participation rate ticked higher.
This Thursday, Fed Chair Janet Yellen has her semi-annual testimony before the Congress and will be determinant for U.S. dollar performance. On Wednesday, Bank of Canada is expected to raise its overnight rate by 25 basis points for the first time in almost seven years (September 2010). Moreover, other economic data, like U.S. and German CPI, as well as the U.K. employment report will attract significant attention from traders.
The week starts quiet with the German trade balance report for May, early on Monday morning. Eurozone’s sentix investor confidence for July is coming afterwards, while in the afternoon the U.S. labour market conditions for June and the consumer credit change for May will be released. During the night, traders will keep a tab for the National Australia bank’s business conditions for June.
Tuesday is also quiet, with most of the economic indicators coming only from the U.S. During the E.U. session, the U.S. NFIB small business optimism and the U.K. inflation hearing report will be published. On the second half of the trading day, trader’s interest will be in the U.S., however, the scheduled economic releases are not expected to trigger significant volatility on the market. Wholesale inventories for May are forecasted to rise 0.3%, the same as the month before. JOLTS job openings for May are also coming out along with the speech from FOMC member Lael Brainard. A half hour after midnight Australian Westpac consumer confidence for July will be monitored.
On Wednesday morning, the U.K. National Statistics will publish the employment report. The ILO unemployment rate is expected to remain unchanged at 4.6% in the three months to May, while the average earnings, including bonuses, are predicted to have risen 1.9% higher in May versus an increase of 2.1% the previous month. Eurozone’s industrial production, also for May, is expected to tick higher 2.7%, year-over-year, versus an incline of 1.4% in April.
Read the full article on JFD Research.