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July NFP: A marginal increase of +215,000

Total US nonfarm payroll employment rose by 215,000 in July, the unemployment rate held at 5.3%, and average hourly earnings for all employees on private nonfarm payrolls rose a nickel, to just under $25. May and June NFP combined was revised just +14,000. July’s marginal increase of +215,000 does not, in my opinion, secure a September rate liftoff, but it does keep the prospect of a September (well telegraphed this week by FED talking heads) move alive. I continue to believe that 2016 will be the start of a gradual process to normalize rates.

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June NFP: Not Great Fireworks at +223,000

Total US nonfarm payroll employment rose by 223,000 in June, the unemployment rate fell to 5.3%, and average hourly earnings for all employees on private nonfarm payrolls were unchanged at $24.95. April NFP was revised from +221,000 to +187,000 and the change for May was revised from +280,000 to +254,000 for a combined revision of -60,000. All in, it’s more of a firecracker than a M80 for sure.

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Greek Fatigue in 3 bullet points

  • Angela Merkel has to consider her legacy in this game of brinkmanship
  • Alexis Tsipras will be blamed by his people for the terrible hardship of a Grexit
  • As Napolean Bonaparte once quipped that in politics stupidity is not a handicap

Regular readers of my blog will recall my March piece entitled ‘Top 3 Reasons Why Greece Will Remain in the Eurozone” which espoused that ultimately politics will save Greece from leaving the single currency. The weekends announcement that Greek banks will be shut for 6 days and ATM withdrawals at limited to 60 Euros a day will be enough to convince Greek voters that the devil they know is better than the unknown of an exit from the Eurozone. Putting the bailout package to a referendum is the political solution to the failure of the negotiating for all these months. What’s not clear to me is what the future holds for Alexis Tsipras, the present Greek prime minister.

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May US Nonfarm Payrolls Surprise to the Upside

Total US nonfarm payroll employment rose by 280,000 in May, the unemployment rate remained at 5.5%, and pay for employees accelerated. March NFP was revised from +85,000 to +119,000 and the change for April was from +223,000 to +221,000. With these revisions, employment gains in March and April were 32,000 higher than previously reported and the average monthly gain over the prior 12 months stands at 251,000. Job gains occurred in professional and business services, leisure and hospitality, health care, and mining employment continued to decline.

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Thank you IMF for validating my US interest rate view

For those that have been reading my blog on ACurrencyAffair.com, you may well remember that I posted a piece in February (“The FED will not raise interest rates in 2015”) of this year that the perfect storm of a strong dollar, the oil collapse, and tepid global growth would delay a US rate rise until early 2016. Today, the IMF’s annual review of the state of the US economy has agreed with two out of three of my points (strong dollar and oil) to urge the FED to delay lifting rates until early 2016.

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The FOMC Passes On A June Rate Rise

The Federal Reserve released the April FOMC statement which essentially restates that the committee will be data dependent in its decision to normalize rates and that the economy still has an opportunity to improve.

If one only were to look at the comparison between the March and April statements (March is italicized), it is easy to read that the economic signals are mixed and that their expectations are

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Notable events the week of 6th April 2015

Opening pitch of the 2015 Major League Baseball season is 8 p.m. EST Sunday, April 5 between the Cardinals and the Cubs and the 28 remaining teams will open the season on April 6.  After this past winter in the Northeast, baseball is a welcome sign of the impending warmer weather that is long overdue.  I make no predictions on the World Series other than to say Go Yankees!

Monday the 6th:

Japan Leading indicator (Prelim.) index 104.9 exp. versus 105.50 prior

US Fed’s Dudley Speaks on Economic Outlook in New Jersey

Canada Ivey PMI index 49.5 exp. versus 49.7 prior

US ISM Non-Manufacturing index 56.6 exp. versus 56.9 prior

 

Tuesday the 7th:

New Zealand RBA overnight rate 2.25% exp. versus 2.25% prior

Spain, France & Germany Services PMI

Eurozone Composite PMI index 54.1 exp. versus 54.1 prior

Eurozone Services PMI index 54.3 exp. versus 54.3 prior

UK CIPS/Markit Servies PMI index 57 exp. versus 56.7 prior

Eurozone PPI %m/m -0.7 exp. versus -0.9 prior

US Fed’s Kocherlakota speaks in North Dakota

 

Wednesday the 8th:

Japan BoJ Policy statement and Governor Kuroda press conference

German factory orders (sa) %m/m 1.5 exp. versus -3.19 prior

Swiss CPI %m/m 0.1 exp. versus -0.3 prior

US Fed’s Dudley speaks on monetary policy in New York

Canada Minister Olivers to speak on state of the Canadian  economy

Japan BoJ MPC- Overnight rate % 0.1 exp. versus 0.1 prior

 

Thursday the 9th:

German industrial production %m/m 0.1 exp. versus 0.6 prior

UK BoE Monetary policy committee meeting and rate decision

UK BoE MPC – APF total 375 bn exp. versus 375 bn prior

UK BoE MPC – Base rate % 0.5 exp. versus 0.5 prior

Canada Building permits %m/m 8.5 exp. versus -12.9 prior

Canada House price index %m/m 0.1 exp. versus -0.1 prior

US Initial claims 278k exp. versus 268k prior

 

Friday the 10th:

China CPI %y/y 1.3 exp. versus 1.4 prior

China PPI %y/y -4.7 exp. versus -4.8 prior

Swiss Unemployment 3.2% exp. versus 3.2% prior

France Industrial production %m/m -0.5 exp. versus 0.4 prior

France Manufacturing production %m/m 0.0 exp. versus -0.1 prior

UK Industrial production %m/m 0.3 exp. versus -0.1 prior

UK Manufacturing production %m/m 0.3 exp. versus -0.5 prior

Canada Housing starts 170k exp. versus 156.3 prior

Canada Net change in employment -10k exp. versus -1k prior

US Fed’s Lacker speaks on economic outlook in Florida

US Import price index %m/m -0.6 exp. versus 0.4 prior

US Fed’s Kocherlakota speaks in Minnesota

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US March Nonfarm Payrolls Dissapoints

Total US nonfarm payroll employment rose by 126,000 in February and the unemployment rate remained at 5.5%. Job gains continued in professional and business services, health care, and in retail trade. Revisions from the previous months where January was revised down from +239,000 to +201,000 and the change for February was revised from +295,000 to +264,000. With these revisions, employment gains in January and February were 69,000 lower than previously reported. This takes the 3-month average gains to just 197,000 per month, from 288,000 previously and ends the 12-month streak of job gains above 200,000 for the month.

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Notable events the week of 30th March 2015

Lots of data out this week but all eyes will be on the US employment figures due out on Friday.  Until then, one should expect range trading in currencies as Yellen’s speech on Friday provided little new information about when rates will rise and it’s all about upcoming wage growth and core consumer price data.

Monday 30th:

Eurozone business climate index 0.18 expected versus 0.07 prior

Eurozone consumer sentiment index -3.7 expected versus -3.7 prior

Eurozone economic sentiment index 103 expected versus 102.1 prior

German CPI (Prelim.) %m/m 0.4 expected versus 0.9 prior

German HICP (Prelim.) %m/m 0.5 expected versus 1.0 prior

US Personal income %m/m 0.3 expected versus 0.3 prior

US Personal spending %m/m 0.2 expected versus -0.2 prior

US Fed’s Fischer speaks on monetary policy and stability in Georgia

Tuesday the 31st:

German retail sales %m/m -0.7 expected versus 2.3 prior

German unemployment change -14k expected versus -20k prior

UK GDP (3rd est.) 0.5 expected versus 0.5 prior

Eurozone flash HICP %y/y -0.1 expected versus -0.3 prior

Eurozone Unemployment 11.2% expected versus 11.2% prior

US Fed’s Lacker speaks on economic outlook in Richmond

US S&P Case-Shiller home price %y/y 4.6 expected versus 4.46 prior

US Chicago PMI index 52.4 expected versus 45.8 prior

US Consumer confidence index 96.6 expected versus 96.4 prior

Japan Tankan index 14 expected versus 12 prior

Wednesday the 1st:

China PMI Manufacturing index 49.7 expected versus 49.9 prior

China HSBC/Markit PMI Manufacturing index 49.3 expected versus 49.2 prior

French Manufacturing index 48.2 expected versus 48.2 prior

German Manufacturing index 52.4 expected versus 52.4 prior

Eurozone Manufacturing PMI index 51.9 expected versus 51.9 prior

US ADP employment survey 230k expected versus 212k prior

US Manufacturing PMI index 55.1 expected versus 55.3 prior

US ISM Manufacturing index 52.5 expected versus 52.9 prior

US Vehicle sales 16.9mm expected versus 16.16mm prior

Thursday the 2nd:

UK CIPS/Markit construction PMI index 60.4 expected versus 60.1 prior

US Initial claims 285k expected versus 282k prior

Friday the 3rd:

US Non-farm payrolls 250k expected versus 295k prior

US Private payrolls 245k expected versus 288k prior

US Unemployment 5.5% expected versus 5.5% prior

 

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The Top 3 Reasons Greece Will Remain in the Eurozone

Consider the old adage of real estate where location, location, location are the sole determination of a property value. Now ponder the situation that the Eurozone finds itself in with the poor southern country of Greece. Long a basket case economically with it’s reliance on tourism and the joke of a tax system, Greece will not be leaving the Eurozone, even though it probably should get the boot. No, Greece will stay in the Eurozone because of politics, politics, politics.

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