• US economy posts largest job gains in 8-months in June, NFP +287k v 175k forecast, 11k previous.
• US June average earnings 0.1% v 0.2% forecast, 0.2% previous, labor force participation 62.7% v 62.6%.
• US Treasury yields rise in front end of curve; bond yields drop, equities rally.
• NY Fed’s Nowcast sees Q2 GDP 2.09% v 2.08% Jul 1; Q3 2.31% from 2.21%.
• Bank of Italy: public money needed to help banks, presses Brussels to allow state aid for its banks.
• IMF sees Brexit shaving ‘Eurozone growth to 1.4% in 2017,risks to growth.include refugee surge, banking weakness.
• Mexico’s Carstens: Banxico’s focus is inflation not exchange rate.
• Brazil real rallies as traders cheer more ambitious fiscal target.
Looking Ahead – Economic Data (GMT)
• –:– China M2 Money Supply YY* Jun forecast 11.5%, 11.8%-previous
• –:– China New Yuan Loans* Jun forecast 1040.0b, 985.5b- previous
• –:– China Outstanding Loan Growth Jun forecast 14%, 14.4%- previous
• 01:30 China PPI YY Jun forecast -2.5%, -2.8%- previous
• 01:30 China CPI YY Jun forecast 1.8%, 2%- previous
• 01:30 China CPI MM Jun forecast -0.3%, -0.5%- previous
• 22:45 New Zealand Election Card Retail Sales month Jun -0.3%- previous
• 22:45 New Zealand Election Card Retail Sales YY Jun 3.3%- previous
• 23:50 Japan Machinery Orders MM May forecast 2.6%, -11%- previous
• 23:50 Japan Machinery Orders YY May forecast -8.7%, -8.2%- previous
• 01:30 Australia Housing Finance May forecast -2%, 1.7%- previous
• 01:30 Australia Invest Housing Finance May -5%- previous
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
EUR/USD is likely to find support at 1.1000 levels and currently trading at 1.1053 levels. The pair has made session high at 1.1119 and hit lows at 1.1000 levels. The U.S. dollar gained against the euro on Friday after data showed U.S. job growth surged in June as manufacturers and other employers boosted hiring, confirming the economy has regained speed after a first-quarter lull, but tepid wages suggested the Federal Reserve will probably not raise interest rates soon. Nonfarm payrolls increased by 287,000 jobs last month, the largest gain since last October, the Labor Department said on Friday. May payrolls were revised sharply down to show them rising 11,000 rather than the previously reported 38,000.The sign of strength in the economy, however, precedes Britain's stunning vote last month to leave the European Union. The so-called Brexit referendum on June 23 roiled financial markets, raising fears that sustained volatility might hit companies' hiring and investment decisions. The euro last traded at $1.1053. It earlier fell to $1.1000, a two-week low, after the jobs data.
GBP/USD is supported in the range of 1.2900 currently trading at 1.2952 levels. It reached session high at 1.3015 and hit low at 1.2902 levels. The U.S. dollar traded flat against the sterling on Friday despite better than expected US payrolls data, as the markets believed that, Federal Reserve will still not raise interest rates again this year. The pound gained along with other major currencies by bumper U.S. jobs figures that still stopped short of convincing markets there was much chance of a rise in interest rates this year. In the late US trading hours , it was up 0.2 percent at $1.2948 and almost half a percent at 85.32 pence per euro, still down respectively 13 and 10 percent since the Brexit vote on June 23. Despite sterling holding against dollar on Friday, most analysts and traders reckon further weakness is on the cards as Britain's current account deficit is one of the highest in the developed world and makes the country, and currency, vulnerable to any pull-back in investment flows due to the uncertainty generated by the referendum vote.
USD/CAD is supported at 1.2972 levels and is trading at 1.3038 levels. It has made session high at 1.3090 and lows at 1.2985 levels. The Canadian dollar weakened against US dollar on Friday after weak Canadian jobs data and better than expected U.S. employment growth weakened Canadian dollar. Canada's sluggish jobs market stalled in June, when the economy shed 700 positions, but the number of people seeking work also fell, and the unemployment rate edged down to an 11-month low of 6.8 percent. The Statistics Canada data released on Friday underlined the challenges facing an economy trying to adjust to weak oil prices that have depressed demand and led to layoffs in the energy industry. The labor participation rate dropped to 65.5 percent, the lowest since December 1999.Full-time positions dropped by 40,100 while part-time jobs rose by 39,400.Meanwhile, U.S. nonfarm payrolls rose by 287,000 jobs last month, the largest gain since last October, the U.S. Labor Department said. May's payroll count was revised down to only 11,000 from the previously reported 38,000.
USD/JPY is supported around 99.98 levels and currently trading at 100.50 levels. It peaked to hit session high at 101.23 and made session lows at 99.98 levels. The dollar declined against the Japanese yen on Friday as the market viewed that the much stronger-than-expected U.S. non-farm payrolls report will not be enough for the Federal Reserve to raise interest in the near future. The US dollar immediately gained after the U.S. economic data, but reversed course against the yen and climbing to two-week highs against the euro and a five-week peak versus the Swiss franc. Data showed that non-farm payrolls increased by 287,000 jobs last month, the largest gain since last October. May's payroll count was revised down to only 11,000 from the previously reported 38,000. In the US session, the dollar dipped to trade at 0.1 percent against the yen to 100.64 yen. The Fed raised rates in December for the first time in nearly a decade. Financial markets expect no further increase this year, but economists believe a December hike is possible if the economy continues to grow and add jobs at a steady pace.
European shares rose on Friday, ending a week of losses on a positive note with Milan outperforming thanks to a rally in its battered banking stocks.
UK's benchmark FTSE 100 closed up by 1 percent, the pan-European FTSEurofirst 300 ended the day up by 1.53 percent, Germany's Dax ended up by 2.4 percent, France’s CAC finished the day up by 1.8 percent.
The benchmark S&P 500 stock index traded above its record close on Friday as Wall Street rallied after a much-larger-than-expected print in jobs growth confirmed the U.S. economy has regained speed after a first-quarter lull.
Dow Jones closed up by 1.37 percent, S&P 500 ended up by 1.50 percent, Nasdaq finished the day up by 1.62 percent.
Short-dated U.S. Treasury yields edged higher on Friday after surprisingly strong U.S. jobs data raised expectations slightly for a Federal Reserve rate hike this year, while long-dated yields hovered near record lows on persistent concerns about global growth.
Two-year yields were last up about two basis points at 0.613 percent after hitting a two-week high of 0.657 percent following the data.
Three-year yields were also up two basis points, at 0.705 percent, after touching an eight-day high of 0.759 percent.
U.S. 30-year yields were last down three basis points at 2.108 percent, a basis point away from a record low of 2.098 percent touched Wednesday. Long-dated yields fell as low as 2.102 percent during the session.
Benchmark 10-year yields were last down two basis points at 1.366 percent after briefly hitting 1.442 percent after the data. Benchmark yields touched record lows of 1.321 percent Wednesday.
Crude prices inched up in choppy trading on Friday but Brent notched its largest weekly drop in nearly six months, as strong U.S. jobs data and bargain hunting by investors pitted against seasonally weak consumption of oil.
Brent crude futures ended the session up 36 cents, or 0.8 percent, at $46.76 per barrel, after trading between $47.23 and $46.15.
U.S. crude's West Texas Intermediate (WTI) futures settled up 27 cents at $45.41, compared with an earlier drop to $44.77 and a high of $45.97.
Gold slipped sharply on Friday after stronger than expected U.S. payrolls data for June but rebounded quickly, underpinned by concerns over the outlook for financial markets following Britain's Brexit vote.
Spot gold, which has risen more than $100 an ounce since Britain voted to quit the EU, was down 0.1 percent at $1,358.87 an ounce by 2:27 p.m. EDT (1827 GMT). It was on track to close higher for the sixth straight week.
U.S. gold futures for August delivery, which fell as low as $1,336.30 an ounce in the wake of the jobs data, settled down 0.3 percent at $1,358.40.
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