- US employment figures awaited after mixed data day
- Canadian unemployment forecast to rise
By David Johnson
Thursday lacked lustre as far as foreign exchange was concerned. There were a lot of data releases and many were worse than expected. The US data is a case in point; Jobless Claims are still slowing, but the Non-Farm employment change was less positive than forecast. The composite Purchasing Managers’ Index (PMI) was weaker than forecast and so was the service sector one; and the factory orders data was pretty bad. Confusingly, the Non-Manufacturing ISM report was quite upbeat.
I am sure there is a presidential Tweet somewhere claiming these data results are all ‘really, really good… they really are’ but that would be par for the course. A sizable drop in crude oil inventories in the US points to potential increased demand and therefore higher energy costs. The US Dollar weakened a little on the extrapolation of all that news.
Today’s US data diary is just as fat and the forecasts are good. The unemployment rate is expected to have slipped to an astonishing 3.8% with a further circa 180,000 extra jobs having been created. If true, this data will strengthen the US Dollar.
European data equally disappointing for Euro
European data started with some poor figures. Most notably, German Industrial Production unexpectedly dropped by 1.1% in August when the markets were expecting 0.2% growth; and Germany’s trade surplus dropped from €19.3 billion last month to €15.8 billion. I am running late this morning and we have just had the Eurozone economic growth data for Q2, which confirmed the Gross Domestic Product (GDP) growth as 2.1%; a smidgeon below previous estimates. That has weakened the Euro a little and chimes with the downturn in Germany’s performance.
Canadian unemployment expected to rise
As well as all the US data, this afternoon brings the Canadian employment reports. In contrast to the US data though, we expect the unemployment rate to have risen marginally. Maybe the US President’s drive for US jobs for US workers is dragging business back from Canada, but maybe other factors are at play.
All PR is good PR, right?
And in an unashamed PR stunt, Burger King are offering someone £20,000 to be the first to try their new chicken burger. If they have to pay you to try it, is that good PR? I am not so sure.