Intraday Market Thoughts

Dollar Damaged on Jobs Report

by Adam Button
Jul 2, 2015 23:20

Soft nonfarm payrolls data and a weak factory orders report kept the US dollar under pressure Thursday. The Swiss franc was the top performer while the Aussie lagged. Australian retail sales are due up next.


The US dollar headed toward an Independence Day long weekend on a sour note after a disappointing jobs report. Payrolls were just shy of the consensus at 223K but soft wage growth, labor force participation and large negative revisions to the two previous months hurt the dollar.

USD/JPY touched a session high at 123.70 just before the data but plunged down to 123.00 afterwards. Other crosses were more resilient at first but they also began to bleed lower after factory orders contracted 1.0% compared to -0.5% expected. Compounding that soft report was a revision to core durable goods orders to -0.4% from +0.4%.

EUR/USD climbed to 1.1110 from 1.1080 and the Canadian dollar and kiwi rebounded after two days of declines.

Overall, the case for a Fed hike in September is slipping but what happens in Greece will loom large on capital markets. The 'Yes' vote appears to be gaining momentum and that could put an end to Tsipras as PM, although he said if that's the vote, he will put the proposal to parliament.

The Asia-Pacific week wraps up with several  notable releases but none bigger than Australian retail sales at 0130 GMT. The consensus is for a 0.5% gain in May after a flat reading in April.

That's followed by the Japan services PMI from Nikkei at 0135 GMT and the China services PMI from HSBC at 0145 GMT. Note that in the months ahead that release will be rebranded, along with the more-important manufacturing PMI.

The larger focus may be Chinese stocks once again and the Australian dollar may also be jarred by iron ore, which fell 6% on Thursday.

 Our Premium long AUDNZD hit its final 1.1400 target from the 1.1040 entry of June 11  . EURCAD breaks out of 200-DMA congestion after surviving neckline support, now +125 pips in the green.
Act Exp Prev GMT
Change in Manufacturing Payrolls (JUN)
4K 6K 7K Jul 02 12:30
Change in Nonfarm Payrolls (JUN)
223K 233K 254K Jul 02 12:30
Change in Private Payrolls (JUN)
223K 225K 250K Jul 02 12:30
Factory Orders (MAY) (m/m)
-1.0% -0.5% -0.7% Jul 02 14:00
Retail Sales (MAY) (m/m)
0.5% 0.0% Jul 03 1:30
RBC PMI Manufacturing (JUN)
51.3 49.8 Jul 02 13:30
Markit Services PMI (JUN)
51.5 Jul 03 1:35
53.8 53.5 Jul 03 1:45

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