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Aussie falls from Non-Farm payroles

Published July 8, 2019

Author : Brett Gordon

Australian investors will get to see just how confident local businesses and consumers really are this week after two interest rate cuts and the coalition’s win on tax cuts. They will also likely see the Australian share market open some 10 points lower on Monday for a soft start to the week, following dips in US and Europe after the local market close on Friday.

The US S&P 500 fell 0.2 per cent despite good news about better-than-expected non-agricultural jobs figures,Friday’s US payrolls for June came in at a better than expected 224k though the unemployment rate rose to 3.7% (from 3.6%).

AMP Capital’s chief economist Shane Oliver said on Sunday. The market took that as a sign that the US central bank won’t cut interest rates as much as had been hoped. There had been hopes of a 0.5 per cent cut by the US Federal Reserve later this month.

President Trump let everyone know that the US economy was going very well, whilst saying it ”would be like a rocket ship” if the Fed lowered rates

Not allot of news out of Europe this week, However German industrial production and trade data for May kick the week off on Monday. We can expect the numbers to have a material impact on the EUR on the day. The markets will then need to wait until Friday for the Eurozone’s May industrial production figures. Finalized French, German and Spanish inflation figures on Thursday and Friday are unlikely to have a material impact on the week.

On the monetary policy front, the ECB Monetary Policy Meeting Minutes are due out on Thursday. Will there be any talk of further easing or will the minutes be aligned with Draghi’s press conference? Outside of the numbers, geopolitical risk will continue to influence.  There’s Iran, China, and Brexit to factor in.