Market Drivers June 15, 2017
AUD Employment beats
UK Retail Sales miss again
Nikkei -0.26% Dax -0.58%
Oil $44/bbl
Gold $1263/oz.
Europe and Asia:
NZD GDP 0.5% vs. 0.7%
AUD Employment 42K vs. 10K
GBP UK Retail Sales -1.2% vs. -0.8%
North America:
GBP BoE 7:00
USD Weekly Jobless 8:30
USD Philly Fed 8:30
Australian jobs data beat on all fronts sending Aussie through the .7600 figure in Asian session trade, but the pair saw little follow through in London and trading settled down.
Australia recorded another superb month of job growth with headline number coming in at 42K versus 10K eyed. Average hours worked increased and the unemployment rate declined to 6.5%. It was the third month in a row that labor figures beat their forecast suggesting that growth Down Under remains robust.
While no one expects RBA to normalize monetary policy anytime soon, many analysts noted that The much stronger than anticipated rise in employment in May and the larger than expected fall in the unemployment rate will go some way to quashing growing talk of the chance of another interest rate cut by the RBA later this year.
The news should keep Aussie bid, especially now that the Fed signaled only one more additional rate hike this year which should keep interest rate spreads between Aussie and the greenback relatively steady.
Elsewhere, in the UK the data continued to disappoint with UK Retail Sales printing at -1.2% versus -0.8% eyed. The news was somewhat offset by revisions higher from the month prior, but it nevertheless highlights the very precarious nature of the UK consumer who is suffering from negative real wage growth as inflation eats into income. At this pace, UK GDP is likely to slow in Q2 and traders will be watching very carefully the BoE rate decision at 1100 GMT. If the central bank remains resolutely dovish ignoring inflationary pressures cable could slip to 1.2600 as the day proceeds.
Lastly in today’s US session the market only gets a look at weekly jobless claims and Philly Fed data, but given the generally hawkish tone of Janet Yellen’s press conference in which she did not move away from any notion of further rate hikes, the buck should remain bid with USDJPY making a move to retake the 110.00 level as the day progresses.
