Daily Market Report 07/07/16


Yesterday in the US the trade deficit rose to $41.1bn (£31.7bn) in May compared with $37.4bn in April. An increase of 10% from April to May while exports decreased by 0.2%, while imports grew by 1.6%. The US consistently runs a trade imbalance, importing more goods than it sells overseas, but as the dollar has continued to strengthen this has become more pronounced as imports are cheaper and exports less competitive. The deficit is particularly pronounced with China, where the gap rose by 19.4% to $29bn the largest difference since November 2015. The trade gap with the European Union also widened by 13.5%.

US Services PMI came out at 51.4 in June 2016 slightly better than the forecast figure of 51.3. From 2013 to 2016, the average Index Point was 55.36, therefore this year has seen lower results than previous years. Overall, doubts surrounding the economic performance will continue, especially with weak business confidence, although the ISM data was notably more encouraging with a significant monthly improvement for June.

Key Announcements

09.30 - GBP: Manufacturing Production MoM – Forecast at -1.2% against previous of 2.3%
13.15 - USD: ADP Non-Farm Employment Change – Forecast at 158K against a previous of 173K
13.30 - USD: Unemployment Claims – Forecast at 269K against a previous of 268K