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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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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

Keith Underwood No Comments

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


Keith Underwood No Comments

Notable events the week of the 9th February 2015

Monday the 9th:

Japanese consumer confidence 39.3 expected versus 38.8 prior

France Business sentiment 97 expected versus 96 prior

Canadian housing starts 184k expected versus 180.3k prior


Tuesday the 10th:

UK BRC Retail sales monitor (%y/y)  0.7 expected versus -0.4 prior

France Industrial production (%m/m) 0.3 expected versus -0.3 prior

UK Industrial Production (%m/m) 0.1 expected versus -0.1 prior

UK Manufacturing Production (%m/m) 0.1 expected versus 0.7 prior

US Fed’s Lacker (voting hawk) to speak on the economy in North Carolina


Wednesday the 11th:

US Fed’s Fisher (non-voting hawk) speaks at The Economic Club of NY

Japan Key Machinery Orders (%m/m) 2.3 expected versus 1.3 prior


Thursday the 12th:

Eurozone Industrial Production (%m/m) 0.2 expected versus 0.2 prior

German HICP (%m/m) -1.3 expected versus -1.3 prior

US Initial claims 287k expected versus 278k prior

US Retail Sales (%m/m) -0.4 expected versus -0.9 prior


Friday the 13th:

French GDP (Preliminary) %q/q 0.1 expected versus 0.3 prior

German GDP (Preliminary) %q/q 0.3 expected versus 0.1 prior

US University of Michigan Sentiment index 98.1 expected versus 98.1 prior

Fed’s Fisher (non-voting hawk) speaks in San Antonio


Keith Underwood No Comments

Notable events the week of the 2nd February 2015

Monday the 2nd:

China HSBC/Markit PMI Manufacturing  49.8 versus 49.8 prior

Eurozone Manufacturing PMI 51 versus 51 prior

UK CIPS/Markit Manufacturing PMI 52.8 versus 52.5

US Personal income 0.2 versus 0.4 prior

US Personal spending -0.2 versus 0.6 prior

US ISM Manufacturing 54.8 versus 55.1 prior


Tuesday the 3rd:

New Zealand RBA Overnight Rate 2.5 versus 2.5 prior

US Factory orders -2 versus -0.7 prior

New Zealand RBA interest rate meeting

US Vehicle sales 16.8m versus 16.8 prior


Wednesday the 4th:

Eurozone Services PMI 52.3 versus 52.3 prior

UK CIPS/Markit Services PMI 56.4 versus 55.8 prior

US ADP Employment Survey 220k versus 241k prior

US ISM Non-Manufacturing index 56.5 versus 56.5 prior


Thursday the 5th:

New Zealand Retail trade 0.3 versus 0.1 prior

German Factory Orders m/m 1.3 versus -2.4 prior

UK BoE MPC – Base Rate 0.5 versus 0.5 prior

US Initial Claims 305k versus 265k prior


Friday the 6th:

German Industrial Production m/m 0.3 versus -0.1 prior

Canadian Net Change in Employment 5k versus -11.3k prior

Canadian Unemployment 6.7% versus 6.7% prior

US Non-Farm Payrolls 231k versus 252k prior

US Unemployment 5.6% versus 5.6 prior

US Fed’s Lockhart speaks on the US economy in Florida (5:45PM)


Keith Underwood 35 Comments

Greece, the petulant child of Europe

Once again, the Greeks are throwing the toys out of the pram over budget and bailout negotiations. Their actions have renewed awareness that this country has not solved all of its financial woes and this carries geopolitical risks.   An equity shocker such as this combined with a 30% drop in oil will add volatility to all asset classes as adjustments to risk must be made.

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Keith Underwood No Comments

Eurozone Manufacturing PMI


Unfortunately there is more bad news for Mario Draghi this morning with weakness across the major Euro area economies as manufacturing PMI’s slipped to 50.1 from 50.4. Particular worry is that Germany, the Eurozone’s largest economy, registered 49.5, down from 50 previously and a 17-month low. A reading above 50.0 for the index indicates an expansion in activity, while a reading below that level signals a contraction. In this scenario of continued feebleness in economic growth, diminished consumer confidence, and high unemployment, the ECB must deliver on unconventional easing to avoid a Japanese style deflationary spiral.

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Keith Underwood No Comments


Mario Draghi, ECB President, spoke Friday at the Euro Banking Congress in Frankfurt and stated that the bank is ready to “step up the pressure” and expand its stimulus program if inflation does not show signs of quickly returning to the bank’s target. Do not take for granted that when the ECB President speaks, he means it.

Mr. Draghi stated that “If on its current trajectory our policy is not effective enough to achieve this, or further risks to the inflation outlook materialize, we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases”.

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