EUR, GBP Back off After Data, FX Await US, Canada Jobs

Sterling retreats despite uncomfortably high PPI figures, German current account surplus slipped, Japanese current account beats expectations, while markets position ahead of US & Canada labour market reports. Latest update on Thursday's Premium trades.

UK June output prices rose 5.7% y/y vs expected 5.5% and last months 5.4% rise. Output prices m/m rise 0.1% from -0.2% in May. June input inflation +17% y/y from 16.1% y/y and 0.4% m/m from -1.7%. The dilemma facing Bank of England policymakers is expected to be once again thrown into focus today with the release of UK producer prices for June. Yesterdays decision to keep rates unchanged at 0.5% would appear vindicated when looking at the latest growth figures from NIESR, which showed that in the three months to June the economy grew by a meagre 0.1%. Not exactly growth, more a mild swelling. Even allowing for that, the PPI reading on an annual basis will continue to make for uncomfortable reading .

Germany May current account surplus slipped to an expected EUR 6.9 bln from a revised EUR 9.0 bln, with exports +4.3% (vs exp +1.5%) and imports +3.7% (vs exp +1.5%)

THURSDAYs PREMIUM TRADES successfully hit the targets of the i) the DOUBLE TRADE in EURUSD as well as OIL LONGS, but got stopped out in Silver & FTSE-100. Tune in for our latest Pre-NFP trades due in 60 mins. To view Thursdays trades, click here: http://ashraflaidi.com/products/sub01/access/?a=452 to become a Premium Member and receive our Intermarket Insights, sign up here: http://ashraflaidi.com/ products/ sub01/

In Asia the Japanese current balance for May came in slightly better than expected, showing a surplus of 391bn yen, up on expectations of 215bn, but below Aprils 546bn, indicating that the economy still appears to be struggling with the after effects of the earthquake but appears to be making better than expected progress.

The recent rise in the Canadian dollar could come to a shuddering halt today with the release of Canadian employment data. Canadas unemployment rate is expected to stay constant at 7.4%, while the net change in employment for June is expected to slip back to 10k, from Mays robust 22.3k figure.

In the US, market expectations for a positive non-farms payroll report for June have been heightened by yesterdays blow-out 157k ADP number.