The Weekly Wrap – US Non-Farm Wages and the Greenback Steal the Show


Outside the United States

Key statistics for the week included private sector PMI figures for July and labor market data.

While the ISM manufacturing PMI rose from 60.6 to 59.6, the non-manufacturing PMI jumped from 60.1 to 64.1.

The sharp rise in the non-manufacturing PMI has raised the prospect of an earlier rather than later move by the Fed.

The midweek labor market figures, however, tempered a rise in the dollar.

According to the ADP, the non-farm payroll increased by only 330,000 in July, well below the expected increase of 715,000.

Weekly jobless claims fell from 399,000 to 385,000 during the week ending 30e July.

The key figures for the week, however, were the July non-farm payrolls figures on Friday.

In July, the United States created 943,000 jobs, as non-farm payrolls increased by 938,000 revised upwards in June. Due to the sharp increase, the unemployment rate fell from 5.9% to 5.4%.

Outside the UK

It has been a relatively quiet week on the economic data front. The finalized private sector PMIs were the focus of attention this week.

Finalized PMI figures for manufacturing and services confirmed weaker private sector growth in July.

The only bright spot was an upward revision of the services PMI. In July, the services PMI index fell from 62.4 to 59.6, against 57.8 previously.

The BoE’s monetary policy decision was more important during the week, however.

As expected, the BoE left its policy unchanged, without hawk dissension.

For the pound, the BoE hinted at a likely tightening over the next 12 months, which was not enough to reach levels of $ 1.40.

During the week, the pound fell 0.23% to end the week at $ 1.3872. The week before, the British pound had risen 1.13% to $ 1.3904.

The FTSE100 ended the week up 1.29%, after gaining 0.07% from the previous week.

Outside the euro zone

The private sector PMIs and the German economy were the focus of attention.

While private sector PMIs were mixed during the week, the euro area composite PMI fell from 59.2 to 60.2. However, this was a drop from the preliminary 60.6%.

Statistics not based on surveys from Germany during the week were also biased towards the positive.

The numbers were in line with German private sector PMI numbers which saw Germany climb to the top of the euro bloc PMI chart.

In June, retail sales jumped 4.2%, with factory orders up 4.1% month-on-month.

Industrial production was negative, however, dropping 1.3% in June. After falling 0.8% in May, economists were forecasting an increase of 0.5% despite the drop in factory orders in May.

From the ECB, the Economic Bulletin was also in the spotlight. As the Bulletin spoke of a strong economic rebound, with stronger growth to come, the ECB spoke of downside risks associated with the Delta variant.

The ECB also continued to reiterate its unwavering support on the monetary policy front.

On the week, the euro fell 0.91% to $ 1.1762. The previous week, the euro had risen 0.84% ​​to $ 1.1870.

The CAC40 rebounded 3.09%, with the DAX30 and EuroStoxx600 ending the week up 1.40% and 1.78% respectively.

For the loonie

It has been a relatively busy week on the economic data front.

Manufacturing PMI and trade data drew attention to the jobs and Ivey PMI figures on Friday.

The statistics were mixed. As growth in the manufacturing sector slowed, Canada saw its trade balance fall from a deficit of C $ 1.58 billion to a surplus of C $ 3.23 billion.

Employment figures are also positive, with the unemployment rate falling from 7.8% to 7.5%. After a 230.7k increase in employment in June, employment increased by 94k in July. Full employment reversed a decline of 33.2,000 from June, increasing by 83,000.

Following the fall in the manufacturing PMI index, however, the Ivey PMI index slipped from 71.9 to 56.4.

In the week ending 6the In August, the loonie fell 0.63% to C $ 1.2554. During the previous week, the loonie had risen 0.71% to reach C $ 1.2475.

Somewhere else

It was a bullish week for the Australian dollar and the Kiwi dollar.

The Australian dollar rose 0.16% to $ 0.7356, with the Kiwi dollar ending the week up 0.52% to $ 0.7010.

For the Australian dollar

Data from the manufacturing sector at the start of the week disappointed. In July, the AIG Manufacturing PMI fell from 63.2 to 60.8.

Housing sector data also did not impress. Building permits fell by 6.7% and mortgage loans by 2.5%.

Things were not looking much better on the consumer side, with retail sales down 1.8%, in line with preliminary figures. Sales had only increased 0.4% in the previous month.

Trade figures were positive, however, with Australia’s trade surplus rising from A $ 9.681 billion to A $ 10.496 billion in June. This increase is attributable to a sharp increase in exports relative to imports during the month.

While the stats were influential, the RBA was also in action earlier in the week.

In line with market expectations, the RBA left its monetary policy unchanged. There were no major surprises in the rate statement to give the Aussie a direction,

At the end of the week, the RBA also released its quarterly statement on monetary policy.

While acknowledging that the economy is recovering faster than expected, the RBA noted that recent Delta variant outbreaks are interrupting the recovery. The statement stressed that the short-term outlook remains highly uncertain and dependent on health outcomes.

The RBA also expects the economy to contract in the 3rd quarter and unemployment rises for some time due to the containment measures.

For the Kiwi Dollar

It has been a quiet week, with employment figures being the key figures for the week.

The numbers were positive for the Kiwi, with employment increasing 1% in the 2sd quarter of this year. As a result of this increase, New Zealand’s unemployment rate fell from 4.7% to 4.0%.

For the Japanese yen

It was a quiet week. The finalized private sector PMIs for July were the focus of attention.

However, the upward revisions from the preliminary figures were of little significance.

The manufacturing PMI index fell from 52.4 to 53.0 in July, down from 52.2 previously. For the services sector, the PMI index fell from 48.0 to 47.4, against 46.4 previously.

The Japanese yen lost 0.48% to 110.25 yen against the US dollar. During the previous week, the yen had risen 0.75% to 109.72.

Outside of china

It was also a quiet week on the economic data front, with economic data limited to private sector PMIs.

It was a mixed set of numbers from China. While growth in the manufacturing sector slowed, activity in the service sector picked up in July.

The Caixin Manufacturing PMI went from 51.3 to 50.3 while the Services PMI went from 50.3 to 54.9.

In the week ending 6the In August, the Chinese yuan fell 0.34% to 6.4831 CNY. The previous week, the Yuan ended the week up 0.31% to CNY6.4614.

The CSI300 and Hang Seng ended the week up 2.29% and 0.84% ​​respectively.


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