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Atlanta Fed GDPNow forecast bumped to 2.7% from 2.6%
Forecast hiked after PCE report
From the Atlanta Fed:
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.7 percent on June 29, up from 2.6 percent on June 24. The forecast for second-quarter real consumer spending growth increased from 4.1 percent to 4.3 percent after this morning's personal income and outlays release from the U.S. Bureau of Economic Analysis. This was partly offset by a decline in the forecast of the second-quarter change in net exports in 2009 dollars from $14 billion to $11 billion after Monday's advance report on international trade in goods from the U.S. Census Bureau.
The next update is Friday.US initial jobless claims 268k vs 267k exp
US initial jobless claims week ending 24 June 2016
As near as straight down the line as you can get it. The 4 week average looks like it's starting to flatten and that could mean that were nearing a bottom. That could reflect further into other jobs data like the NFP's.
Which markets are closed for July 4th?
U.S. markets will be shuttered July 4 in observance of Independence Day, while the rest of the world treats the U.S. exit from the Brits just like any other Monday.
The Fourth of July is typically associated with fireworks to commemorate the break from the U.K., but fireworks came early for global markets last Friday after a so-called Brexit, or British exit from the EU, emerged the winning side in the EU referendum, roiling global markets.
So far, investors are calmer, at least for the moment. But many traders could use a longer respite. Here’s the run down of what’s closed in the coming days:
US auto sales for June come in weaker than expectations
As per Autodata
US Market Insight: NFP, FOMC Minutes to Dominate Holiday-Shortened Week
With the Independence Day Holiday on the Forth of July, trading in the US will be focused on the monthly jobs report and minutes from the latest Federal Reserve meeting, which might reveal discussions about a rate hike, even when markets expect no change until at least the end of the year.
On Monday, the US commemorates its declaration of independence from Great Britain. Stock and bond markets will be closed, along with government offices.
The holiday-shorten week will be on Friday, when the Bureau of National Statistics will release its heavy-hitting non-farm payrolls report for June. After the disastrous May reading, which revealed only 38,000 newly created private sector jobs, it is now expected to post 179,000 jobs.
That would be the third straight month of a reading under 200,000.
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June ISM non-manufacturing expected 56.5 vs 53.3 expected
Details of the June 2016 ISM non-manufacturing index
Details:
Initial jobless claims 254K vs 269K expected
Weekly US initial jobless claims data:
It's a great number and comes before the holiday-skewed week.
The improving trend in this series is tough to argue against.
Non-farm payrolls results for June 2016
USD Volatility: The Week Ahead
The U.S. economy may have added 287k jobs in June, but we’re not impressed. Judging from the performance of the dollar post payrolls, most forex traders share our views. When the report was first released, USD/JPY jumped to a high of 101.28, but it reversed quickly hitting a low of 99.99. However the pullback to 100 was short-lived with the currency pair bouncing back to its pre-NFP level within minutes. Part of this is due to the rise in U.S. stocks and general improvement in risk appetite. But 100 is also a very important technical level and it is clear that there were a lot of bids at that rate. Although job growth rebounded strongly, the unemployment rate rose more than expected and average hourly earnings growth slowed. Job growth was incredibly weak in May but instead of an upward revision, the report was revised down by another 27k. And that leaves the 2-month average at less than 150k. Jon Hilsenrath of the Wall Street Journal argues that this may be enough for the Fed to raise interest rates in September -- a view we completely disagree with.
While it's true that Fed Fund futures went from pricing in an 11% chance of tightening in 2016 to 22% post payrolls, there’s no reasonable case for a rate hike before the end of the year, especially since we don’t expect any of next week’s economic reports to provide upside momentum for the dollar. The most important piece of U.S. data scheduled for release next week will be U.S. retail sales, and between the decline in wage growth, the sharp drop in gas prices in June and lower spending reported by the Johnson Redbook survey, all signs point to lower consumer spending and a more restrained increase in consumer prices. Six Federal Reserve Presidents are scheduled to speak but only two (George and Bullard) are FOMC voters. Both have hawkish leanings but given the deterioration in U.S. data and Brexit uncertainty, they could indicate that more caution is needed on raising rates. With two monetary policy announcements, continued Brexit risks, U.S. retail sales, Chinese trade and GDP numbers on the calendar, we anticipate another volatile week for the greenback. There may not be a tremendous amount of consistency as the dollar should remain weak versus the yen but strong against the European currencies and mixed versus the comm dollars.
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