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June

German data continues to decline

Published: Friday 07 June 2019

  • German data continues to decline
  • US employment data dominates


Surprisingly, the European central bank did not adopt the negative tone that many had expected yesterday. Despite leaving their base rate on hold, there was no talk of looser monetary policy unless the market deteriorated and that boosted the Euro against the USD and, to a lesser extent against the Pound as well. However, Germany's central bank dropped its forecast for Germany's economic growth this year from 1.6% (their December guess) to just 0.6% and Germany's trade surplus narrowed to €17 Bn in April from €22.7 Bn the previous month. Maybe the ECB's rhetoric will change if the currency sharing bloc's largest economy sees further erosion. 
 
The Ivey Purchasing Managers index gave a very positive view of the Canadian economy in May and the employment component of the index was at a 9 month high. Add in the fact that Canada's trade deficit sank to a 6 month low and it can be no surprise that the Canadian Dollar strengthened right across the board. 
 
It is a public holiday in China and Hong Kong today, so the markets were thinly traded overnight but that didn't, on this occasion, prompt a lot of volatility. 
 
There is a smattering of UK and EU housing market data this morning but today is really all about the US employment data. We are expecting a rise of something like 185,000 in the number of people in work in America and, whilst that is probably not enough to bring down the already exceptional 3.2% unemployment rate it is, nonetheless, very good for the US economy. As long as average hourly earnings rises at 3.2% or better, the USD will have some oomph in it before the end of the day. That is a technical terms I will be happy to explain if you have 30 minutes or so. 
 
Let's not forget that Canada will be releasing employment data as well. As with the US, we are expecting growth in the number in work but don't expect the unemployment rate to come down from last month's 5.7%. For such a vast country with such widely spaced population, that is an exceptionally low unemployment level and should put upward pressure on wages, so should continue to strengthen the Canadian Dollar. 
 
And a French tourist has made an online appeal for someone to find her lost camera. Lily Mika lost the camera on the island of Skye after a few days there taking topless selfies. These images are all on the camera. There are unconfirmed reports that 43,000 men are helping in the search. 
 




 
Brief text exchange
 
From Wife: Windows frozen. What do I do?
From Hubby: Pour some warm water over it
From Wife: Done that. Is it bad that the laptop is fizzing and popping now?
 
 
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