US jobless numbers on Friday were slightly lower than forecast (215,000 against estimates of 225,000), but were robust enough to indicate that September remains the most likely month to see the first rate rise from the Federal Reserve.
Movement in the dollar certainly indicated this line of thinking, strengthening against the euro and pound. Upward revisions of 14,000 to the previous two months’ non-farm payrolls number is positive, but concerns remain about wage growth, which dipped slightly to 2.1% on a yearly basis.
Looking ahead this week we have US advance retail sales due out on Thursday (13 August). These are forecast to be 0.6% month-on-month. The University of Michigan consumer confidence survey is expected to rise (as it did last month) and hit 93.6.
Super Thursday not a blockbuster after all
After a considerable build up in the media, Super Thursday was not as volatile for the pound as many expected. Several Monetary Policy Committee members were expected to shift in favour of rate rises and the market was positioned accordingly.
However, the minutes showed only one member looking for higher rates and the pound is yet to recover from the sharp sell-off at Thursday lunchtime. In terms of data, this week is a quiet one for the pound, with only unemployment data on Wednesday to look forward to. Much like the US, the key figures to look for are the accompanying data on wage growth, which is expected to continue to track ahead of inflation.
Euro’s focus on Greece and Germany this week
Greece is back in the headlines this morning, but thankfully on a positive note. An €86 billion deal between the Hellenic Republic and its creditors looks set to be approved by both sides in the coming days.
Data-wise the focus is all on Germany, with the ZEW economic sentiment survey and GDP data on Tuesday and Friday respectively. Have a great week.
