Daily Market Report 08/07/2013

The US dollar was the biggest gainer on Friday based on continuing speculation that the Fed will look to taper its quantitative easing program.

The US department of labour revealed that an extra 195,000 new jobs were added in June whilst the unemployment rate remained at 7.6%. The data once again reinforces the case for the Federal Reserve to begin tapering their QE program potentially as early as September.

With both the Bank of England and European Central Bank announcing last Thursday that they were looking to maintain monetary stimulus for longer than markets were initially anticipating; the case for the US dollar to continue to gain against both the pound and the euro still looks strong.

The only other notable data from Friday came from Canada, where their unemployment rate remained at 7.1% but the net change of employment didn’t fall as badly at the market was anticipating painting a better picture for the Canadian labour market.

Today, focus will be on Brussels, where EU finance ministers will be meeting to discuss Greece’s next tranche of bailout funds. It appears that international creditors for the struggling country are less than pleased about the pace of reforms in the country and intend on delaying payment of the next tranche of €8.1bn.

Looking ahead to the rest of the week, the headline event will be the Federal Open Market Committee meeting, where Bernanke may give further indication as to when the Fed will take action to taper monetary stimulus.

Key Announcements:

9.30am – EUR – Sentix Investor Confidence (Jul): Expected to improve to -10.

11.00am – EUR – German Industrial Production (May): Expected to fall to -0.5%.

13.30pm – CAD – Building Permit (May): Expected to fall to -6.2%.

20.00pm – USD – Consumer Credit Change (May): Expected to improve to US$12.5bn.