What drives the market on July 1?
The market sentiment is mixed. Let’s look at most interesting movements on the market today.
US unemployment rate demonstrates 4% low
In February, American job surge demonstrated an upbeat move, bringing the country’s unemployment rate to a more than 17-year minimum of 4%. However, wage gains are anticipated to have speeded down following three straight months of firm hikes.
The crucial employment report issued by the Labor Department on Friday is believed to underscore the American economy's strength and also drive expectations that the US major financial institution is going to lift its interest rate estimates for this year. American financial markets have nearly priced in an interest rate hike at the key bank’s March 20-21 policy gathering. The Federal Reserve is currently projecting up to three rate lifts in 2018.
Some market experts are assured that a stronger jobs report with another upbeat crop of wage hikes improves chances that the Federal Reserve might initiate a fourth rate lift before the end of 2018.
In February, nonfarm payrolls rallied by 200,000 jobs amid shockingly mild weather after a similar jump in January. Apparently, it would overleap the monthly average of 181,000 jobs demonstrated last year.
As for average hourly earnings, in February they gained 0.2%. Average hourly earnings rebounded following October’s sudden dive, earning 0.3% in November.
The previous month's anticipated moderation lowered the year-on-year jump in average hourly earnings from 2.9% to 2.8%, which is the largest leap since June 2009.
However, wage surge in February could be shocking on the upside due to a calendar quirk. Another factor was the fact such companies as Starbucks Corp as well as FedEx Corp made use of their $1.5 trillion income tax cut package to have workers' salaries lifted. Besides this, Walmart uncovered a leap increase in entry-level wages for hourly staff members at its American stores.
The American economy is currently approaching full employment and there’re worries that fiscal stimulus such as income tax cuts as well as increased government spending could provoke overheating.
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Will the NFP push the USD again?
Non-Farm Payrolls data will be released on Thursday at 15:30 MT time.
Will the European labor dynamic boost the EUR?
The European unemployment rate will be announced on Thursday at 12:00 MT time.
Latest news
The RBA: keeping the AUD alive?
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
What will affect markets on July 3?
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
How to trade on July 2?
The risk-on tone is back on the market again. Let’s look at main trading opportunities.
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