FX Week Ahead - Chinese & US Manufacturing PMIs; Eurozone Inflation; US NFP & Unemployment Rate; US Holiday

07/02 FRIDAY | 12:30 GMT | USD NONFARM PAYROLLS & UNEMPLOYMENT RATE (JUN)

The main issue for the US Dollar when it comes to the June US Nonfarm Payrolls report is whether or not the US labor market regained its momentum after a stumbling in back-to-back reports in April and May report. The April print came at +266K against an expectation for +1000K (or +1M) jobs added, while the May reading registered +559K versus 650K expected.

The fits and starts of the US economy fully reopening don’t seem to be dissuading forecasters from projecting a rebound in US labor market prospects, as falling jobless claims and rising vaccination rates bode well for US labor market potential. According to a Bloomberg News survey, forecasters are looking for jobs growth of +700K, while the unemployment rate (U3) is anticipated to drop from 5.8% to 5.6%. Meanwhile, the US labor force participation rate is due in at a meager 61.7%.

Even if there are good jobs data, there is still a long ways to go before the US reaches ‘full employment’ as experienced pre-pandemic. According to the Atlanta Fed Jobs Growth Calculator, the US economy needs +740K jobs growth per month over the next 12-months in order to return to the pre-pandemic US labor market of a 3.5% unemployment rate (U3) with a 63.4% labor force participation rate.

07/02 FRIDAY, 07/05 MONDAY | USD FINANCIAL MARKETS CLOSED FOR FEDERAL HOLIDAY

The US Independence Day of July 4 falls on a Sunday this year, meaning that federal observations will take place between Friday, July 2, and Monday, July 5. As a result, US financial markets will be operating on a unique schedule that will result in lower trading volumes; especially after the June US NFP report on Friday, there might be a sharp decline in market activity.

- On Friday, July 2, US bond markets close at 14 EDT/18 GMT. Meanwhile, US equity markets will have normal trading hours.

View single page >> |
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.