Macro Roundup (Jul 8)

SHANGHAI, Jul 8 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.

Last weekend

The US dollar traded sharply higher against all of the major currencies on the back of Friday's non-farm payrolls report. The dollar index climbed more than 1% to the highest in two-and-a-half weeks, to 97.446. 

Base metals ended mostly lower as LME zinc lost 0.72%, tin fell 0.71%, lead slid 0.27%, copper dropped 0.3%, aluminium dipped 0.28%, while nickel gained 0.69%. SHFE zinc slipped 0.1%, aluminium eased 0.07%, lead fell 0.44%, while nickel gained 1.22%, copper rose 0.04%, and tin climbed 0.16%. 

US non-farm payrolls came out stronger than expected according to the Department of Labor. The number of jobs created in June increased by 224,000, the best showing since January. This compared to expectations that payrolls would increase by 165,000 jobs. The payroll report for May was revised slightly lower to 72,000 from 75,000. 

The unemployment rate edged up to 3.7% as labour force participation rose. Expectations had been for unemployment to remain unchanged at 3.6%. 

Salaries also increased but missed expectations. The average hourly earnings number disappointed, rising 0.2% on the month against expectations for a 0.3% growth. On a year-over-year basis, wages were up 3.1%, also a notch below market estimates of 3.2% and indicative that wage inflation remains subdued. 

Markets have been widely anticipating that the central bank will cut its benchmark interest rate later this month, regardless of June payroll data.

Day ahead

China will release data on its social financing and M2 money supply for June, Germany will publish data on its industrial output and trade balance for May, and the eurozone will release data on the Sentix survey of investor confidence for July.