EUR\USD bottoming

* The dollar was higher against the yen but lower versus the euro ahead of the 4th of July weekend. US nonfarm payrolls fell for the time this year and factory orders declined for the first time in nine months, signaling US economic growth is slowing. For the week, the USD fell versus the euro, yen, pound and Swiss franc while gaining against the Australian and Canadian dollars. The S&P 500 declined 4.79 to 1,022.58. The yen consolidated some of this week’s strong gains. Sterling was up modestly, just below the 1.52-area resistance. The Australian dollar was little changed. Australian new Prime Minister Julia Gillard scaled back Australia’s mining tax proposal. The Canadian dollar was pressured by speculation the Bank of Canada will not raise its key interest rate amid slowing global growth.

* Although gaining for a third consecutive day, the EUR/USD failed to close above the important 1.25-1.26 resistance. The pair rallied yesterday after breaking its downtrend, following news of less-than-expected demand for the European Central Bank’s emergency lending program and a successful Spanish bond auction. Technically, the EUR/USD has formed an inverted head-and-shoulder. The resistance from the neckline held today. If this is broken, the pair will likely rise to the 1.30-area resistance.

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Financial and Economic News and Comments

US & Canada

* US nonfarm payrolls fell 125,000 in June, the first decline this year, after upwardly revised gains of 433,000 in May and 313,000 in April, figures from the Labor Department showed. The June decline reflected a 225,000 drop in the number of temporary workers for Census 2010. The unemployment rate declined to 9.5% from May’s 9.7%. Private-sector payrolls rose 83,000 in June after a downwardly revised 33,000 advance a month earlier. Manufacturing employment increased 9,000 following May’s upwardly revised 32,000 gain, having added 136,000 jobs since December 2009. Amusements, gambling, and recreation (+28,000), temporary help services (+21,000), technical consulting (+11,000), business support services (+7,000), transportation and warehousing (+15,000), health care (+9,000), and mining (+6,000) added jobs in June. Payrolls in wholesale trade, retail trade, information, and financial activities showed little change, while construction employment (- 22,000) and government employment (-208,000) fell over the month. Average hourly earnings slipped 0.1% m/m to $22.53 in June after a downwardly revised 0.2% m/m increase in May. Growth in average hourly earnings slowed to 1.7% y/y from May’s 1.9% y/y. Average weekly hours declined to 34.1 in June from 34.2 the prior month.

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* US factory orders fell a more-than-expected 1.4% m/m to $413.2 billion in May, the first decline in nine months, after a downwardly revised 1.0% m/m increase in April, according to data from the Commerce Department. May factory orders rose 14.4% y/y nsa. Excluding transportation, factory orders fell for a second month in May, falling 0.6% m/m to $366.4 billion, following a revised 0.7% m/m April decrease; however, they climbed 15.5% y/y nsa.

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Europe

* Eurozone unemployment rose a seasonally adjusted 35,000 m/m in May to 15.789 million, Eurostat reported. The seasonally adjusted unemployment rate was 10.0%, the highest since August 1998 and unchanged from April’s downwardly revised 10.0%, compared with May 2009’s 9.4%.

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* Eurozone producer prices grew as forecast 0.3% m/m in May, an eighth straight month-on-month gain, after an upwardly revised 1.0% m/m increase in April, PPI data from Eurostat showed. May producer prices rose as expected 3.1% y/y, a third consecutive year-on-year rise and the most since October 2008, following a 2.8% y/y April advance.

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* The CIPS/Markit construction PMI slipped marginally to 58.4 in June from 58.5 in May, showing UK construction activity expanded for a fourth consecutive month and remained at a strong pace, boosted by a further increase in new business, according to data from Markit Economics and the Chartered Institute of Purchasing and Supply.

Asia-Pacific

* Japan’s monetary base grew 3.6% y/y in June after a 3.7% y/y increase in May, the Bank of Japan said.

Источник: Hans Nilsson

02.07.2010