USD - Major events in the week ahead

Friday, Jul 08 2016

Events that marked the week:

On Wednesday Trade Balance, Non-Manufacturing PMI and FOMC Meeting Minutes data was released. US goods and services deficit was $41.1 billion in May, up $3.8 billion from $37.4 billion in April, revised. Analysts were anticipating deficit of $40 billion. May exports were $182.4 billion, $0.3 billion less than April exports. May imports were $223.5 billion, $3.4 billion more than April imports.The May increase in the goods and services deficit reflected an increase in the goods deficit of $3.7 billion to $62.2 billion and a decrease in the services surplus of $0.1 billion to $21.1 billion.

Non-Manufacturing PMI registered 56.5 percent in June, 3.6 percentage points higher than the May reading of 52.9 percent. This represents continued growth in the non-manufacturing sector at a faster rate. According to the NMI, 15 non-manufacturing industries reported growth in June. Respondents’ comments are mostly positive about business conditions and the economy. Overall, the report reflects a strong rebound from the 'cooling-off' of the previous month for the non-manufacturing sector.

Thursday was marked by ADP Employment Change and Unemployment Claims figures. Private sector employment increased by 172,000 jobs from May to June according to the June ADP National Employment Report. “Since the start of 2016, average monthly job creation has slightly dropped,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “Lackluster global growth, low commodity prices, and an unfavorable exchange rate continue to weigh on U.S. companies, especially larger companies.”

Separate report on Unemployment Claims showed that initial claims for unemployment benefits fell by 16,000 last week to a nearly three-month low of 254,000, showing no evidence of rising layoffs ahead of the key U.S. jobs report for June. Economists polled by MarketWatch had forecast new claims to total a seasonally adjusted 265,000 in the week stretching from June 26 to July 2.

On Friday focus was on NFP figures. Total nonfarm payroll employment increased by 287,000 in June, after changing little in May (+11,000). In June, job growth occurred in leisure and hospitality, health care and social assistance, and financial activities. Employment also rose in information, largely reflecting the return of workers from a strike. The unemployment rate increased by 0.2 percentage point to 4.9% in June, and the number of unemployed persons increased by 347,000 to 7.8 million. These increases largely offset declines in May and brought both measures back in line with levels that had prevailed from August 2015 to April.

This week markets will be looking at:

JOLTS Job Openings (Tuesday 16:00)

Unemployment Claims (Thursday 14:30)

PPI (Thursday 14:30)

CPI (Friday 14:30)

Retail Sales (Friday 14:30)

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