[B]Market Review[/B] - 07/03/2014 [I]20:34GMT [/I]
[B]U.S. dollar rises on robust U.S. jobs report[/B]
U.S. dollar strengthened against major currencies after the release of higher-than-expected U.S. non-farms payrolls data. Employers added 175,000 jobs to their payrolls last month after creating 129,000 (upwardly revised) new positions in January. However, the unemployment rate rose to 6.7% from a five-year low of 6.6% as Americans flooded into the labor market to search for work. The data added speculations that the Federal Reserve will continue to reduce its monetary stimulus despite the icy weather that gripped much of the nation.
The single currency rose to a fresh 2-1/2 year peak at 1.3915 on signs that the European Central Bank’s balance sheet was shrinking. On the data front, German Jan industrial production came in at 0.8% m/m n 5.0% y/y, vs the forecast of 0.8% n 3.9%, previous reading is revised to 0.1% n 3.4% respectively, however, euro pared all the gains after the release of robust U.S. jobs report. The pair retreated to 1.3853 before trading sideways in New York session.
U.S. dollar rallied to as high as 103.76 against the Japanese yen after the release of robust U.S. jobs report, however, profit-taking knocked price lower to 103.12 before trading sideways in New York session on mounting tensions over Ukraine led stocks in Europe and elsewhere to retreat, while U.S. shares traded near flat. The British pound strengthened briefly to 1.6787 on Friday before retreating to 1.6706 in New York afternoon.
In other news, former Federal Reserve Chairman Ben Bernanke said on Friday that the U.S. boom in onshore natural gas production has cut power prices and appears to be contributing to the “reshoring” of manufacturing jobs from overseas. “It’s a terrific development. I don’t want to overstate it but it’s one of the bright spots in the economy,” Bernanke said at the IHS CERAWeek energy conference in Houston.
Bernanke said “the jobs number we got this morning was consistent with a recovering economy; signs of less wrangling in Congress over the debt limit and the budget should help alleviate worries among investors.” However, Bernanke added more needs to be done on “too big to fail” rules that would limit the risks financial institutions can take. He added that he feels relatively optimistic about the global economy.
[B]Data to be released next week: [/B]
Japan trade balance, GDP, Eco watchers survey, France industrial production, manufacturing production, Swiss retail sales, Italy Industrial production, U.K. Lloyds employment confidence, EU Sentix investor confidence, Canada housing starts [B]on Monday. [/B]
Australia NAB business confidence, NAB business conditions, Japan rate decision, U.K. sales like-for-like, industrial production, manufacturing production, Germany trade balance, exports, imports, current account, Italy GDP, U.S. wholesale inventories and wholesale trade sales [B]on Tuesday. [/B]
Australia consumer confidence, home loans, Japan tertiary industry index, BSI large all industry, BSI large manufacturing domestic CGPI, consumer confidence, U.K. trade balance, EU industrial production, U.S. monthly budget statement [B]on Wednesday.[/B]
New Zealand rate decision, Australia employment change, unemployment rate, Japan machine orders, China fixed assets exclude rural, retail sales, industrial production, U.K. RICS house price balance, France HICP, CPI, Italy HICP, Canada capacity utilization rate, new housing price index, U.S. retail sales, initial jobless claims, import price index, business inventories on [B]Thursday[/B].
New Zealand manufacturing PMI, Japan industrial production, capacity utilization, Germany CPI, HICP, U.S. PPI, university of Michigan consumer confidence [B]on Friday[/B].