The Weekly Wrap – Economics and Delta Variation Show Mixed Results
Outside the United States
After a quiet start to the week, consumer confidence figures impressed Tuesday. The CB Consumer Confidence Index hit a 16-month high in June.
By midweek, ADP’s non-farm employment development figures indicated another sharp increase in hiring. In June, the ADP reported an increase of 692,000 non-farm jobs, following an increase of 886,000 in May.
On Thursday, attention shifted to weekly jobless claims and manufacturing PMI numbers.
In the week ending 25e In June, initial jobless claims fell from 415,000 to 365,000.
However, activity in the manufacturing sector grew slightly weaker in June, with the ISM manufacturing PMI rising from 61.2 to 60.6.
While the stats provided dollar support, non-farm payroll data at the end of the week was the key stat of the week.
In June, the government reported an increase of 662,000 non-farm jobs after an increase of 516,000 in May.
Despite the increase, the unemployment rate fell from 5.8% to 5.9%.
Economists had forecast that the non-farm workforce would increase by 570,000 and the unemployment rate would fall to 5.7%. The participation rate was maintained at 61.6% against an expected increase of 61.7% …
In equity markets, the Dow Jones rose 1.02%, with the NASDAQ and the S & P500 ending the week up 1.94% and 1.67% respectively.
Outside the UK
It was another relatively quiet week, with GDP and finalized manufacturing PMI figures in the spotlight.
The statistics were biased towards the negative as the UK economy contracted more than expected in the 1st trimester.
Quarter over quarter, the economy contracted 1.6%, revised down from preliminary guidance of 1.5%.
In June, the manufacturing PMI index fell from 65.6 to 63.9, which was revised down from 64.2.
Outside of the economic calendar, concerns about the continued spread of the Delta variant added further downward pressure on the pound.
During the week, the pound fell 0.40% to end the week at $ 1.3824. The week before, the British pound had risen 0.50% to $ 1.3879.
The FTSE100 ended the week down 0.18%, after gaining 1.69% from the previous week.
Outside the euro zone
It was another busy week.
The economic sentiment figures for the euro zone in brief this Tuesday.
A rebound in economic sentiment in June provided some support for the euro at the start of the week.
By midweek, German unemployment figures and Eurozone inflation figures were the center of attention.
While unemployment figures were positive for the euro, inflationary pressures in the euro area eased in June.
According to preliminary figures, the annual inflation rate in the euro area fell from 2.0% to 1.9%.
On Thursday, however, June’s manufacturing PMIs were positive.
Spain’s manufacturing PMI fell from 59.4 to 60.4, while Italy’s fell slightly from 62.3 to 62.2.
The German manufacturing PMI index fell from 64.4 to 65.1, compared to 64.9 previously.
The French manufacturing sector experienced a moderate slowdown in growth, with the PMI index dropping from 59.4 to 59.0. However, this was an increase from the preliminary 58.6.
As a result, the eurozone manufacturing PMI fell from 63.1 to a record high of 63.4, down from 63.1 previously.
Eurozone unemployment figures for May were also bullish, with the unemployment rate falling from 8.1% to 7.9%.
Retail sales figures in Germany were also positive for the market on Thursday. Retail sales rose 4.2%, partially reversing a 6.8% drop in April.
On the week, the euro fell 0.59% to $ 1.1865. The previous week, the euro had risen 0.61% to $ 1.1935.
The DAX30 rose 0.27%, while the CAC40 and EuroStoxx600 ended the week down 1.06% and 0.18% respectively.
For the loonie
GDP, RMPI and trade data were the focus of attention during the week.
The statistics were biased in the positive, as the Canadian economy contracted less than expected. In April, the economy contracted 0.3% against an expected contraction of 0.8%. The economy grew 1.3% in March.
The RPMI jumped 3.2% in May, following a 1.0% increase in April, with the uptrend supporting the resumption of inflationary pressures globally.
By the end of the week, however, Canada’s trade balance fell from a surplus of C $ 0.59 billion to a deficit of C $ 1.39 billion. Economists had forecast a deficit of C $ 0.30 billion.
In the week ending 2sd In July, the loonie fell 0.24% to C $ 1.2322. During the previous week, the loonie had risen 1.39% to reach C $ 1.2292.
It was a bearish week for the Australian dollar and the Kiwi dollar.
In the week ending 2sd In July, the Australian dollar fell 0.84% to $ 0.7526, while the Kiwi dollar fell 0.66% to $ 0.7026.
For the Australian dollar
It was another quiet week. The focus of attention was private sector credit numbers, along with manufacturing and trade data.
The statistics were biased towards the positive but were not strong enough to avoid a loss to the greenback.
In May, credit to the private sector rose 0.4%, after rising 0.3% in April.
Manufacturing activity was also on the rise, with the AIG manufacturing index rising from 61.8 to a new high of 63.2.
More significant, however, was the widening of the trade balance from A $ 8.028 billion to A $ 9.681 billion in May. Enlargement was driven by a 6% jump in exports.
For the Kiwi Dollar
It has been a relatively quiet week.
Business confidence was at the center of the concerns mid-week.
In June, the ANZ Business Confidence Index fell 3 points to -0.6%. However, the company’s own activity index rose by 5 points to + 31.6%.
While building permits for May were also on the agenda, an unexpected 2.8% drop in permits had little impact on the Kiwi.
For the Japanese yen
It has been a busy week.
Retail sales figures for May beat expectations at the start of the week. Year over year, retail sales increased 8.2% versus 7.9% forecast. In April, retail sales increased 11.9%.
In the middle of the week, however, the industrial production figures disappointed. Production fell 5.9% according to preliminary figures, reversing a 2.9% increase from April.
On Thursday, the focus then shifted to 2sd quarter Tankan survey issues.
While it is rising in the 2sd quarter, only the All-Big Industry capex exceeded expectations, up 9.6% versus 5.2% expected. In the 1st quarter, the index had increased by 3%.
The Tankan Big Manufacturing Outlook index fell from 4 to 13, while the index of large manufacturers fell from 5 to 14. In the service sector, the index of large non-manufacturers fell from -1 to 3 in the 2sd trimester.
The Japanese yen fell 0.27% to 111.05 yen against the US dollar. During the previous week, the yen had fallen 0.49% to 110.750.
Outside of china
The private sector PMI figures for June were the focus of attention this week.
The statistics were negative but were not low enough to sound the alarm.
In June, the NBS manufacturing PMI fell from 51.0 to 50.9, with the non-manufacturing PMI rising from 55.2 to 53.5.
Markets preferred Caixin Manufacturing PMI fell from 52.0 to 51.3.
In the week ending 2sd In July, the Chinese yuan fell 0.26% to 6.4730 CNY. The week before, the yuan had fallen 0.05% to 6.4562 CNY.
The CSI300 and Hang Seng ended the week down 3.03% and 3.34% respectively.