US Non farms disappoint

3 July, 2015

Rob Bastin

The markets are now awaiting a referendum vote from Greece this weekend to know anything further on whether they will or won’t be a part of the Euro in the future. This provides a couple of days where traders can again focus on some key economic releases with the US taking centre stage yesterday. Non-farm payrolls is one of the main events in the month for the USD and recent months have provided some excellent figures with improvements in the labour markets starting to be seen.

The markets expected a lower figure this month however the drop was greater than expected with just 223k new nonfarm jobs, shy of the 230k forecast by analysts. To accompany this average earnings was also came in worse than expected with no growth at all compared to 0.2% growth in wages shown last month. The only positive figure was the unemployment rate itself dropping to 5.3% from 5.5% previously, however it was the weaker data that caught traders interest as the USD was sold during the afternoon making it slightly cheaper for purchasers. Markets currently expect a rate hike in September from the Federal Reserve, however experts have questioned whether this figure could increase the likelihood of a October or November hike instead.

Today is a bank holiday in the US ahead of 4th July celebrations. This means a lower liquidity of trading this afternoon than usual, and with big announcements awaiting over the weekend it is likely that trading will be relatively flat today. There are a few releases this morning and any significant change in the figures will likely drive rates for the day ahead. UK Services PIM is released at 9:30am with Euro-zone Retail Sales at 10am.