Daily Market Report 06/06/16

USD

On Friday afternoon we saw some big movement in the dollar off the back of some poor jobs data.  With The U.S. economy creating the fewest number of jobs in more than five years in May as employment in the manufacturing and construction sectors fell sharply, suggesting a deterioration in the labour market that could make it harder for the Federal Reserve to raise interest rates. Employers hired 59,000 fewer workers in March and April than previously reported. While the unemployment rate fell three-tenths of a percentage point to 4.7 percent in May, the lowest since November 2007, that was in part due to people dropping out of the labour force.
 
The Fed bank has signalled its intention to raise rates soon if job gains continued and economic data remained positive. However this poor employment figure may make Janet Yellen and the Fed think twice about hiking rates in June or July.
 

EUR

Growth in the European economy remained subdued in May suggesting that the continent's recovery is still struggling to get out of "low gear". Markit's final Purchasing Managers' Index for the Eurozone region was 53.1 in May, slightly better than last month’s figure of 53.  The survey data signals a GDP rise of 0.3% in the second quarter. Poor economic performance in the second quarter points to an ongoing lack of growth momentum, this in turn raises the prospect of policymakers seeking new ways to stimulate growth.
 

 

GBP

Britain's services picked up in May after dropping to a three-year low in April, the upcoming “Brexit” referendum on European Union membership still weighing heavily on new business and hiring. Markit's services activity index rose to 53.5 in May from 52.3 in April. Markit chief economist Chris Williamson stated that "Growth has collapsed in manufacturing and construction, leaving the economy dependent on the service sector to sustain the upturn, though even here the pace of expansion has remained frustratingly weak so far this year,"
 
The survey also reported that one in three companies are suffering from the uncertainty created by Britain's June 23 referendum, suggesting the economy could rebound if the country votes to stay in the EU.

 

Key Announcements

10:30 – EUR: ECB Targeted LTRO
 
15:00- USD: US Labour Market Conditions Index (May)
 
17:30 – USD: US FED Chair Janet Yellen Speaks