August 3 2012

In the broadcast today: USD, EUR and JPY New Trading Week Outlook. After three days of important events and economic data have kick-started the month of August, we turn our attention to the week ahead and focus on the EUR, the USD, the GBP and the JPY as the currencies that will take the center stage when the new trading week gets underway, we list the Top 10 spotlight events that will move the markets next week, we examine the consensus forecasts for the upcoming economic data, we analyze the short squeeze in the EUR/USD currency pair, we examine the factors behind today’s weakening of the JPY, we keep an eye on the GBP/USD currency pair ahead of a sequence of important U.K. economic data, we highlight the market’s reaction to the Euro-zone and the U.K. Services PMI, the U.S. Non-Farm Payrolls and the ISM Non-Manufacturing Index, we discuss new forecasts from Royal Bank of Canada and Lloyds Banking Group and prepare for the trading week ahead.

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USA 

The U.S. economy added 163,000 jobs in July but the unemployment rate remained stubbornly above 8% for another month with an increase to 8.3%; Rebalancing of US economy is underway but retail sales and factory orders data point to weaker jobs growth in months ahead…



Powered by Guardian.co.ukThis article titled “US jobs data less rosy than they seem” was written by Larry Elliott, economics editor, for guardian.co.uk on Friday 3rd August 2012 14.47 UTC

There are three months to go until the US presidential election so the America jobs report will cheer Barack Obama after recent signs that the world’s biggest economy was coming off the boil. But the figures were not unalloyed good news for the president.

On the upside, the increase of 163,000 in non-farm payrolls was a lot better than the 100,000 rise Wall Street had been expecting. What’s more, the detail was encouraging, with a hefty jump in private-sector employment and a 25,000 increase in manufacturing jobs. A modest and long overdue, but welcome, rebalancing of the US economy is underway.

That said, the expansion of the labour market is no great shakes more than three years into a recovery, and extremely poor by US standards – America was once the envy of the world for its ability to create jobs in the upswings after recessions.

The payrolls numbers were accompanied by a household survey of unemployment which showed the jobless rate climbing from 8.2% to 8.3%, 0.4 points higher than when Obama became president.

The U6 rate, which includes people who are working fewer hours than they would like, rose to 15%. Throw in a labour participation rate lower than it was four years ago, and tepid wages growth, and the picture is of jobs data good enough to rule out for the time being any fresh steps from the Federal Reserve to boost activity but not good enough to prove conclusively that the economy is emerging from its soft patch.

Obama would no doubt like a helping hand from the Fed, but if Ben Bernanke and his colleagues were not prepared to do more quantitative easing when jobs growth slowed between April and June, they are unlikely to do so now.

As in Britain, the labour market seems to be in slightly better shape than the economy as a whole. As Chris Williamson of Markit noted, the recent data for retail sales and for factory orders has been weak, suggesting that the economy has lost momentum since the turn of the year. That points to weaker jobs growth in the months ahead.

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