Wise Money sees no surprises on Thursday.
Following the much hyped 25bps rate increase from the ECB yesterday, it seems Monsieur Trichet may have disappointed Euro bulls in the statement that followed.
With his moderate tones, he commented on the risk of further upside inflationary pressures but at the same time he remains concerned about growth, this along with his "no bias" sentiment put the euro immediately under pressure, not helped by a stronger US Dollar.
With perfect timing the Fed released the often volatile Non-farm payrolls at exactly 1:30pm. The jobs number for the month of June was bad but not bad enough to stifle the gains in the US dollar. Non-farm payrolls fell by 62k, the sixth consecutive decline in a row.
The April number was revised down from -49k to -62k while the unemployment rate remained at 5.5%, matching the highest level since October 2004.
Anything short of 100k had been viewed as being dollar positive and that is exactly how the market reacted. The biggest contributors were healthcare, education, leisure and government. The biggest losers were in goods producing and business services.
Elsewhere UK PMI services reported further contraction last month. Britain's dominant services sector shrank in June at its sharpest rate since the aftermath of the 9/11 attacks on the United States, a survey showed on Thursday, in a sign the economic slowdown is gaining traction.
However, signs from the CIPS services survey that companies are managing to ramp up their prices to partly offset record high cost inflation are likely to reinforce the view that the Bank of England is unlikely to cut interest rates any time soon.
The Bank's quarterly credit survey, also published on Thursday, showed the credit squeeze for households and businesses looked set to intensify over coming months as lenders braced for defaults amid a deteriorating economic outlook.
Today being a New York holiday should prove to be relatively quiet and there is a severe lack of data due for release.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
With his moderate tones, he commented on the risk of further upside inflationary pressures but at the same time he remains concerned about growth, this along with his "no bias" sentiment put the euro immediately under pressure, not helped by a stronger US Dollar.
With perfect timing the Fed released the often volatile Non-farm payrolls at exactly 1:30pm. The jobs number for the month of June was bad but not bad enough to stifle the gains in the US dollar. Non-farm payrolls fell by 62k, the sixth consecutive decline in a row.
The April number was revised down from -49k to -62k while the unemployment rate remained at 5.5%, matching the highest level since October 2004.
Anything short of 100k had been viewed as being dollar positive and that is exactly how the market reacted. The biggest contributors were healthcare, education, leisure and government. The biggest losers were in goods producing and business services.
Elsewhere UK PMI services reported further contraction last month. Britain's dominant services sector shrank in June at its sharpest rate since the aftermath of the 9/11 attacks on the United States, a survey showed on Thursday, in a sign the economic slowdown is gaining traction.
However, signs from the CIPS services survey that companies are managing to ramp up their prices to partly offset record high cost inflation are likely to reinforce the view that the Bank of England is unlikely to cut interest rates any time soon.
The Bank's quarterly credit survey, also published on Thursday, showed the credit squeeze for households and businesses looked set to intensify over coming months as lenders braced for defaults amid a deteriorating economic outlook.
Today being a New York holiday should prove to be relatively quiet and there is a severe lack of data due for release.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: euros, interest rates, unemployment, wise money
posted by Wise Money @ 5:47 PM
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