U.S. and Canadian Jobs Day

July 5, 2013

Folks who took Independence Day off missed a lot of excitement, as both the European Central Bank and Bank of England took steps to control bond market damage caused by talk of Fed tapering.  See my reviews of the ECB and BOE actions.  Attention today now turns to the U.S. Labor Department employment report due at 12:30 GMT. 

But first, there’s been a very disappointing German data report on industrial orders, which slumped 1.3% in May on top of a 2.2% drop in April.  These declines leave orders in May 2.0% lower than a year earlier and orders in April-May averaging 0.5% less than in the first quarter.  Domestic orders for capital goods, which are a leading sign of future business investment tumbled 2.7% in April and by an even greater 4.1% in May.

Sterling weakness is today’s main currency market development.  The pound hit a 3-month dollar low of $1.4963 and is down 0.6% against the U.S. currency on balance.  The greenback otherwise is up 0.2% against the loonie, euro and Swiss franc and 0.1% firmer relative to the kiwi and yuan.  The U.S. dollar has lost 0.2% against the Australian dollar.

European equities rose sharply on Thursday but today show losses of 0.5% in Spain and 0.2% in France, Germany and Italy.  The British Ftse is 0.5% stronger, however.  In the Pacific Rim earlier today, share prices advanced by 2.1% in Japan, 1.9% in Hong Kong, 1.0% in Australia, 1.4% in Taiwan, 0.7% in Singapore but just 0.2% in China.

Ten-year German bund and Japanese JGB yields edged a basis point higher.  The 10-year British gilt climbed four basis points.

Gold retreated 1.4% to $1234.10 per ounce.  WTI oil remains above the $100 per barrel threshold, albeit 0.1% lower than Thursday’s close at $101.14.

Japan posted the highest index of leading economic indicators in May since June 2007.  The coincident index improved for a sixth consecutive time, prompting officials to say it may be signaling a turning point.

Translation losses from yen depreciation caused Japanese international reserves to fall by $11.53 billion in June after a loss of $7.72 billion in May.

Swiss reserves fell back to CHF 434.9 billion in June, a bit lower than expected.  Swiss consumer price inflation surpassed expectations in June, rising 0.1% on month and posting a 12-month 0.1% dip after falling by 0.5% in the year to May.

The French trade deficit widened 33% on month to EUR 6.0 billion in May.

Australia’s construction purchasing managers index rose 3.8 points to a four month high in June but remained depressed nonetheless with a reading of 39.5.

Norway, Denmark, Spain and Hungary reported non-market moving industrial production data.  All were lower in May than a year earlier.

Filipino producer prices posted an 8.9% on-year decline in May.  Filipino CPI inflation ticked up to 2.8% in June from 2.6% in May.

Canada also reports jobs data at 12:30 GMT today.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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