Article / 28 July 2016 at 7:00 GMT

Morning Markets: Waiting for more US data after mildly hakwish comment



  • Germany: Labour market statistics (0800 GMT)
  • EU: Business & Consumer Surveys (0900 GMT)
  • US: Unemployment Insurance Weekly Claims Report - Initial Claims (1230 GMT)
  • US: EIA Weekly Natural Gas Storage Report (1430 GMT)
  • Japan: CPI (Nation), CPI ex-food (Nation) (2330 GMT)
  • Japan: Preliminary Industrial Production (2350 GMT)

The Fed yesterday came with a statement which was "definitely a lot less dovish amd more constructive than the previous" as Saxo's Kay Van-Petersen put it. Markets seem to have expected a more hawkish tone and  generally the USD lost across the board, but remains contained in within the ranges.

Apart from the usual flock of Fed speakers buzzing around, next key dates are the FOMC minutes and the Jackson Hole Symposium (both in August) and the September 21 Fed meeting.

Today when it comes to the US economy we will get an update about the jobless claims. For bears looking for warning signs for the US economy those have been a persistent nuisance. With rare exception, this leading indicator has signalled growth for the labour market and, by extension, the economy for much of this year – even when other numbers looked worrisome. 

Today’s update is expected to provide more of the same.’s consensus forecast sees claims rising 11,000 to seasonally adjusted 264,000 for the week through July 23. But as the chart below illustrates, that’s still close to the 43-year low of 248,000 that was touched back in April. 

But the day starts with German unemployment data. It will likely deliver another dose of upbeat data. The official jobless rate is widely expected to remain at a modest 6.1%. Meanwhile, the number of newly unemployed workers has fallen in each of the past 11 months through June, suggesting the labour market's still growing.

The months ahead could nevertheless prove to be challenging as the UK slides into recession, as many economists are predicting. But for the moment, Germany’s momentum still looks strong enough to smooth over any rough patches and it’s unlikely that today’s unemployment figures will provide a reason to argue otherwise.

Germany’s economy may be relatively resilient to any Brexit-related blowback, but the euro area generally is somewhat less hardy. Details will become known when the Eurozone Business Climate Indicator will be out.

Market signals

Asian session

  • Australia's June quarterly import prices fell 1%; a rise of 1.6% was expected
  • BHP flags a $1.3bn hit after last year's Samarco dam disaster in Brazil
  • Chinese regulators plan a tough clampdown on wealth management products
  • In Asia trade, the USD weakened against peers, losing 0.5% to the JPY
  • The Bloomberg Dollar Spot Index, had lost 0.3% in mid Asia trading
  • About twice as many shares fell as rose on the MSCI Asia Pacific Index
  • The Nikkei was hit hardest, down 1.09% at 0508 GMT
  • The Hang Seng was down 0.42% and Shanghai fell 0.67% as at 0514 GMT
  • The Mumbai Sensex (up 0.31%) and the ASX/S&P 200 (up 0.32%) were the gainers

Forex ahead

  • JPY pared back most of Wednesday’s decline to trade at 104.88 per USD
  • In Asia trade the AUDUSD was up 0.4% at $0.7524

From the Floor

Fed up? ”The market was expecting more from the FOMC”,” says Hardy

Facebook’s big beat “This company is a bullet train leaving the station,” says Garnry 

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

Germany’s momentum looks strong enough to smooth over any rough patches and it’s unlikely today’s unemployment figures will provide a reason to argue otherwise, says James Picerno. 

Shock and awe
Many are expecting the BoJ Governor and Japan's Prime Minister to throw everything at Japan’s deflationary mindset, making USDJPY the focus for FX traders, writes Max McKegg.

Inch by inch

The general consensus seems to be that Janet Yellen and the Fed are inching towards a September hike, suggests Saxo's SIngapore team

The Italian job
No matter how the European Union will treat the troubled Italian banks, it will affect markets, writes Michael Boye. 

Frankfurt or London?
Deutsche Boerse and LSE want to merge, but amid Brexit, having headquarters located in London is heavily disputed, reports Clemens Bomsdorf.


 On the move to London or will Brexit make this bull in front of
Frankfurt's stock exchange stay? Photo:iStock

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