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US Open Preview – Dollar moves with caution ahead of NFP employment report
July 6, 2018 12:26 pmVideo
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Here are the latest developments in global markets:
Day Ahead: US payrolls & wage data and Canadian jobs figures on the agenda
The main event today will be the US employment report for June at 1230 GMT. Nonfarm payrolls are anticipated to have risen by 195K from 223K in the preceding month. The unemployment rate is projected to remain unchanged at a the18-year low of 3.8%, while average hourly earnings are expected to increase by 2.8% in yearly terms, from 2.7% previously.
In case these data come out stronger than anticipated – particularly on the wage front – markets are likely to begin pricing in a higher probability that the Fed may deliver four quarter-point rate hikes this year, from three that are already priced in. On the other hand, a disappointment would possibly generate some skepticism as to how many hikes the Fed will deliver this year, thereby weighing on the greenback.
Canada will also release its own employment data for June at 1230 GMT. The unemployment rate is forecast to have held steady at 5.8%, while the net change in employment is anticipated to have rebounded by 24.0k, following a sharp decline of 7.5K in May. A positive surprise in data would likely bring encouraging news to the loonie in which case a possible bullish retracement is expected.
Remaining in Canada, Ivey PMI readings will also come into view today at 1400 GMT, though it is worth noting that the loonie has recently shown little reaction to these numbers. The forecast is for the index to tick higher to 63.2 in June from 62.5 the prior month.
Later in the day, Baker Hughes will report on the US oil rig counts for the week ending June 29.
Also, today the British Prime Minister, Theresa May, will meet with her senior ministers to have a discussion for reaching a common ground on the UK’s future trading relationship with the EU after Brexit. Until now, PM May’s advisors suggested two proposals, but none of them gained the full support of her party.
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