The US Federal Reserve, European Central Bank, and the Bank of England all decided to leave rates unchanged this week. The Fed left its rate at less than 0.25 percent, while the ECB and BOE declared they have held their respective rates at 0.50 percent.
The US Non-Farm Employment Change, one of the key economic data releases this week, showed on Friday that there were 162,000 new Americans employed in July, according to the US Bureau of Labor Statistics. The ADP Non-Farm Employment Change released Wednesday was way off with a 200,000 reading. Unemployment rate stood at 7.4 percent, and Average Hourly Earnings eased 0.1 percent for the same period.
The National Association of Realtors said US Pending Home Sales eased 0.4 percent in June after posting a 5.8 percent gain last May.
US ISM Manufacturing PMI leapt to 55.4 in July from June’s 50.9 reading.
In other news, UK Manufacturing PMI and Construction PMI improved considerably in July, rising 54.6 and 57.0 respectively, reports from Markit showed.
Japan’s Household Spending surprisingly declined in June. Consumer spending eased 0.4 percent when analysts expected a modest 1.2 percent gain, on the back of May’s 1.6 percent decline. Unemployment Rate improved slightly to 3.9 percent from the previous month’s 4.1 percent, while June’s Preliminary Industrial Production contracted 3.3 percent, following May’s 1.9 percent advance.
Commodities
Gold has been moving lower for most of the week until Friday’s US jobs data came along. Price broke through the recent consolidation and touched a $1,283 low before it popped higher. The upside pop enabled Gold to close the week above the $1,300 level, after testing support below the level. Bulls escaped the drop through the consolidation this time, but the considerable task of breaking through the consolidation top situated at $1,347 is up ahead.
Potential double top has been printed in Oil after price drove toward the July 19 high and reversed quickly. With the weekly close just below $107, price could try to revisit $105 early next week. Price could stay in the $102-$108 area for quite some time.
Currencies
It was another tough and relatively whipsaw-y week for EURUSD as the pair moved quite erroneously by mid-week after the recent ranges got pulverized on both sides. Control changed hands between bulls and bears, but ultimately price ended up virtually unchanged for the week. Slight advantage goes to the buyers based on their performance on Friday. 1.3400-50 remains as the key upside area to break.
USDJPY bulls raged on Thursday to bring price nearly 200 pips higher, but Friday’s US jobs data spoiled the ascent and erased about half of Thursday’s gains. Bulls should continue to support price around the 97.50-98.50 area in the coming week.
GBPUSD was down all throughout the week except on Friday when bulls tried to salvage price from the 1.5102 lows off of the release of the weaker-than-expected US jobs data. That data pop higher managed to recover more than half of the week’s decline but it was not enough to make price close above the 1.5300 level. Next week, buyers should aim for a move back toward 1.5400-50.
The Week Ahead
Unlike the previous weeks, Monday will be relatively active with the release of Australia’s Retail Sales; UK Halifax HPI; Spain, Italy, the UK, and Euro-area Services PMI; Euro-area Retail Sales; US ISM Non-Manufacturing PMI
Tuesday activity will come in the form of UK BRC Retail Sales Monitor; Australia’s Trade Balance, Interest Rate Announcement and Statement, and HPI; UK Manufacturing and Industrial Production and NIESR GDP Estimate; Germany Factory Orders; Canada and US Trade Balance; US JOLTS Job Openings.
Wednesday starts early with New Zealand Employment Change and Unemployment Rate; followed by Australia’s Home Loans; Switzerland’s SECO Consumer Climate and Consumer Price Index; BOE Carney speech and BOE Inflation Report; Canada’s Ivey PMI and Building Permits.
On Thursday, there are Japan’s Current Account, Bank Lending, and Monetary Policy Statement; Australia’s Employment Change and Unemployment Rate; China’s Trade Balance; Germany’s Trade Balance; ECB Monthly Bulletin; Canada’s NHPI; and US Unemployment Claims.
Friday ends the week with RBA Monetary Policy Statement; China’s New Loans, Fixed Asset Investment, Industrial Production, Retail Sales, PPI and CPI; UK Trade Balance; and Canada jobs data.
