The Commerce Department reported today that U.S. consumer expenditure grew for the fifth month in a row in June having jumped 0.4%. Spending is being supported by the firm growth in income, which increased 0.4% in June, owing to the recovering labour market. Despite the gains in expenditure, inflation slipped in June.
During the month of July 209,000 jobs were added in the US. Compared to the previous month and the current month's forecast, 298,000 and 230,000 respectively, the number was disappointing. However, being the six month in a row to increase by over 200,000 jobs, it represents a sign of increasing optimism regarding the economic view. Adding to this, the unemployment
According to the reports by Markit published today, the Euro Zone's PMI decreased unexpectedly in July. The manufacturing PMI dropped slightly to 51.8 falling down from 51.9 in the previous month. The Euro Zone's manufacturing PMI was expected to stay unaltered at 51.9, but has declined due to further reduction in French manufacturers.
The Aussie declined to its lowest price in two months against the US Dollar after the Australian PPI dropped 0.1% during the month of June. Depending on the release concerning the non-farm employment change in the US, with a forecast of 231,000 more jobs, the pair could slump even more. The pair traded at 0.9283 after slipping 0.09%.
The Sterling reached the lowest level in six weeks versus the U.S. Dollar following the issue of the disappointing U.K. PMI figures as investors remained prudent ahead of expected U.S. jobs report. GBP/USD reached 1.6840 in the morning, consolidating at 1.6850. The Manufacturing Purchasing Managers' index dropped to 55.4% last month.
South Korea's Won touched a 6-month low amid the growing demand for the U.S. Dollar as the figures showed positive signs of the economic recovery of the United States. The Won depreciated 0.9% to 1,037.10 per Dollar, the biggest decrease since the end of January. The Bloomberg Dollar Spot Index by-turn jumped 0.8% for the third weekly rise.
The Pound is feeling continued pressure with the Dollar reaching higher levels. As the GBP/USD pair broke through both the 1.7 and 1.69 levels the soon due UK manufacturing PMI needs to show some really positive numbers to halt the decline. However, there seems to be further support for the USD from both the economy's data and institutions downgrading their forecast for the GBP/USD.
Spanish Manufacturing PMI dropped to 53.9 from 54.6 in the previous month. Analysts had forecast an increase to 54.7. During the morning, Euro Stoxx 50 decreased 0.72%, CAC 40 lost 0.83% and DAX retreated 0.75%. Despite several important releases due for this day, the most anticipated releases are the US non-farm employment change and unemployment rate.
This Friday gold futures climbed gently. However, as US data revealed a day before supported the greenback, the contract remained close to its lowest value in six weeks. On the commodity exchange division of the NYME, December's gold was traded at 1,285.40 dollars per troy ounce, capped by positive US data releases.
The Sterling experienced its biggest monthly depreciation versus the Dollar since May 2013 as omens of the growth in the U.S. economy fueled expectations for increased Fed interest rates. The Pound slipped 0.2% to $1.6884 prolonging its monthly decline to 1.3%. The Sterling also weakened 0.1% to 79.28 pence per euro, reducing the gain in July to 1%.
Canada's Dollar reached the weakest level in nearly two months following the figures indicating the economy growth is underperforming that of U.S. The Loonie dropped 0.3% to C$1.0930 per U.S. Dollar, the lowest level since June 9th. The Canadian Dollar slipped for the first month since January despite the fact that Canadian GDP grew 2.3% from the year earlier.
Brasil's Real experienced the largest decline among global currencies with Argentina missing a bond payment. The Real saw the largest drop amidst the 16 major currencies as it fell 0.8% against the Greenback to 2.2636. Moreover, since Argentina is a strong Brazilian trade partner and Brazil's budget deficit is a concern the recent events could foresee a further decline.
China's manufacturing gauge increased in July at the fastest pace in nearly two years, showing that economic growth is getting stronger. PMI was at 51.7, exceeding expectations of 51.4, while a gauge for smaller manufacturers in China's PMI went above 50, which was last seen in March 2012. As growth is seen stabilizing, the government will be able to pay
US stocks plummeted with many factors influencing the move such as poor corporate earnings reports, tensions in Ukraine and worries about a market top. The Dow Jones industrial average dropped 1.9% and the Nasdaq composite 2.1% with Whole Foods Market and Exxon Mobil leading the downturn. In addition oil, gold and the US Treasuries also fell for the day.
Argentina's President Cristina Fernandez de Kirchner opposed the Standard & Poor's default announcement for Argentina, which could be its second one in 13 years. As the bond prices of Argentina plummeted Fernandez said that she's open to additional talks but paying the hedge funds would cause additional claims and destroy the country's economy.
The Greenback made way towards biggest monthly gain against the Euro since February 2013 after signs of the consolidating U.S. economy induced the traders to boost forecasts for higher Fed interest rates. The Dollar appreciated against all of its 16 major peers this month as jobless claims dropped to the lowest in nearly eight years.
Euro-area inflation suddenly decelerated this in July to the lowest in nearly five years, emphasizing the ECB's concerns the economy is too weak to boost price growth. The inflation was 0.4% this month compared to 0.5% in June. The inflation rate has consistently been weaker than 1% for the last 10 months, whereas the unemployment rate stayed close to the record high for months.
U.S. treasuries are approaching a second month's loss as investors bet that the Fed will increase interest rates due to economic growth in the U.S. exceeding expectations. The government securities declined 0.1% this month, while the extra yield on 10-year notes went up to 139 basis points versus German bunds. The 10-year yield was little changed at 2.54% and it
According to Nationwide the housing prices in July only increased by 0.1% on the month and were lower on the year falling from 11.8% the previous month to 10.6%. The BoE has already introduced measures to combat risks of such a high level of borrowing for home purchases and these news could finally indicate a cooling of the UK's red hot housing market.
Subsequent to two months of increasing, the number of unemployed people in Germany decreased by 12,000. Forecasts pointed to a decrease of 5,000 people. During the previous month the number of unemployed people increased by 7,000.
The Texas light sweet declined for a forth day in a row due to rising US fuel supplies. With the supplies increasing by 365,000 barrels to 218.2 million the WTI September futures contract fell by 1.1% and was trading at $99.16 a barrel on the NYMEX. Meanwhile, the Brent was also lower at $105.88 a barrel losing 63 cents for the day.
The Aussie depreciated against the U.S. Dollar today, following the issue of the downbeat construction approvals data from Australia, however the Fed's latest statement restricted the Greenback growth. AUD/USD reached 0.9307 during the morning trade, but dropped 0.13% and consolidated at 0.9318. The building approvals in Australia slipped 5% last month as compared to the projected decline of only 2%.
For the second time in twelve years Argentina has defaulted. Argentina had until midnight, as a deadline for coupon payment concerning exchange bonds. Having failed to honour the debt, Argentina defaulted once again. However, this time the country remains solvent and it is a matter of how fast it will be sorted out. Argentina has foreign exchange reserves of 29
The bearish sentiment for Russian shares reached a record in March yet it quickly turned as the Micex has gained 29% since then. With the sanctions being milder than expected it added another 2.6% yesterday and was trading at $24.46. In addition, many traders are now simply staying away from this market as its further direction is very uncertain.