13:15pm US June ADP private employment 15:00pm US June ISM manufacturing index 15:00pm US May Pending home sales
Wednesday, 1 July 2009
Today's Highlights
13:15pm US June ADP private employment 15:00pm US June ISM manufacturing index 15:00pm US May Pending home sales
FX Market Overview
In an otherwise extremely sad tragedy, the news of the rescue of a 14-year old girl swimming in choppy seas among dead bodies and plane wreckage at 4.00am yesterday morning was a true miracle. She was the sole survivor of the 153 passengers on the Yemeni Airline which went down off the Comoros islands off the coast of Tanzania.
The pound reached a 7-month high against the US dollar yesterday when it finally broke out of the 4-cent range between $1.62 and $1.66, which had confined its movements for most of June. This surge came to an abrupt halt however when a much worse than anticipated final Q1 UK GDP figure spoiled the party.
We all know we are in a recession but “The green shoot brigade” have recently talked up a storm so only a small revision of -0.2% was expected to the preliminary Q1 number. When traders heard that growth had in fact contracted a further 0.5% it was time to take profit and sell the proud pound. For the record this was the biggest contraction in the UK economy in over 50 years. The small print made for depressing reading, with business investment, the household saving rate and the balance of payments all looking fairly ugly.
Talk of a “double dip” back into the recession ether is gathering pace, as the signs of recovery become a little dubious. You can’t get a better measure of growth than GDP, so unless we see UK employment and housing holding up in the summer months, I am afraid “The yellow weed brigade” will hold the upper hand.
What’s certain is it will hopefully shut-up the ridiculous obsession some hawkish economists have with planning for the first interest rate hike. The Bank of England are not silly, they will require a plethora of hard evidence before they consider a hike in interest rates. The smart money is on a rate hike end of 2010.
This has made for a very exciting week so far with extremely choppy trading conditions expected to continue into the US holiday weekend starting Friday. The US holiday on Friday has bought forward the June nonfarm payroll employment number from its traditional Friday slot to tomorrow. This economic release is almost certain to “rattle a few cages” after an extremely good number in May which suggested US employment had bottomed out and was in a recovery phase. After weaker than forecast recent US weekly jobless claims the risk is the number is worse than the expected 375k lost jobs and 9.6% unemployment.
Early this afternoon the June private employment ADP report is released as a prelude to tomorrows nonfarm payrolls. So watch out for this number at 13:15pm which is also forecast to be -375k.
Later this afternoon US June ISM manufacturing and US May pending home sales are also of interest and are both expected to show deterioration on the previous month.
Overnight Australian May retail sales soared twice the amount economists had predicted. Retail sales look to have responded positively to the government’s first stimulus package, having risen 4% since its introduction. In stark contrast to retail sales Australian May building approvals fell a staggering -12.5% against an expectation of a +3.0% rise.
Sometimes enterprising businessmen can be a downright health hazard. Take the example of a Sri Lankan mosquito repellent factory manager who narrowly escaped a six month jail term for failing to destroy mosquito breeding areas on company premises to stop the spread of dengue fever, as it was bad for business.
The pound reached a 7-month high against the US dollar yesterday when it finally broke out of the 4-cent range between $1.62 and $1.66, which had confined its movements for most of June. This surge came to an abrupt halt however when a much worse than anticipated final Q1 UK GDP figure spoiled the party.
We all know we are in a recession but “The green shoot brigade” have recently talked up a storm so only a small revision of -0.2% was expected to the preliminary Q1 number. When traders heard that growth had in fact contracted a further 0.5% it was time to take profit and sell the proud pound. For the record this was the biggest contraction in the UK economy in over 50 years. The small print made for depressing reading, with business investment, the household saving rate and the balance of payments all looking fairly ugly.
Talk of a “double dip” back into the recession ether is gathering pace, as the signs of recovery become a little dubious. You can’t get a better measure of growth than GDP, so unless we see UK employment and housing holding up in the summer months, I am afraid “The yellow weed brigade” will hold the upper hand.
What’s certain is it will hopefully shut-up the ridiculous obsession some hawkish economists have with planning for the first interest rate hike. The Bank of England are not silly, they will require a plethora of hard evidence before they consider a hike in interest rates. The smart money is on a rate hike end of 2010.
This has made for a very exciting week so far with extremely choppy trading conditions expected to continue into the US holiday weekend starting Friday. The US holiday on Friday has bought forward the June nonfarm payroll employment number from its traditional Friday slot to tomorrow. This economic release is almost certain to “rattle a few cages” after an extremely good number in May which suggested US employment had bottomed out and was in a recovery phase. After weaker than forecast recent US weekly jobless claims the risk is the number is worse than the expected 375k lost jobs and 9.6% unemployment.
Early this afternoon the June private employment ADP report is released as a prelude to tomorrows nonfarm payrolls. So watch out for this number at 13:15pm which is also forecast to be -375k.
Later this afternoon US June ISM manufacturing and US May pending home sales are also of interest and are both expected to show deterioration on the previous month.
Overnight Australian May retail sales soared twice the amount economists had predicted. Retail sales look to have responded positively to the government’s first stimulus package, having risen 4% since its introduction. In stark contrast to retail sales Australian May building approvals fell a staggering -12.5% against an expectation of a +3.0% rise.
Sometimes enterprising businessmen can be a downright health hazard. Take the example of a Sri Lankan mosquito repellent factory manager who narrowly escaped a six month jail term for failing to destroy mosquito breeding areas on company premises to stop the spread of dengue fever, as it was bad for business.
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