US jobs report & summer recess

Today is all about the US jobs report (non-farm payrolls) - but it’s also the last chance for Congress to agree a stimulus bill before their Summer recess.

So even though they’ve agreed to come in next week- to save their own holidays (or vacations!) there’s a chance American politicians get their act together and agree a new stimulus bill.

Let’s take a walk down memory lane quickly. Remember June was a big surprise with the US economy adding 4.8 million jobs instead of the 3 million expected and with higher jobs revisions to May; the unemployment rate improved from 13.3% to 11.1%. The dollar jumped on the positive surprise- but improved risk sentiment and concern about US virus cases pulled it right back down again- the dollar was pummelled ever since.

So what are we looking for this time? Well US President Donald Trump said there will be another “big job number on Friday.” He wasn’t privy to the data when he said it so he’s just being typically optimistic. Economists are expecting 1.6 million new jobs, with the unemployment rate falling to 10.5%.

One stark reason to think Trump’s optimism might be misplaced was the massive ADP private payrolls miss - where only 167,000 jobs were created when markets had expected 1.3 million. The open question is how much some states postponing or scaling back reopening plans has impacted people returning to their jobs.

Also before I wrap up- given the huge moves taking place in the euro, gold and silver - net positioning data from the COT report will be very interesting. Last week’s data showed euro net positions hit a new record high of 157.56 thousand. Let’s see what’s happened to gold after the move through $2000.

Thanks for reading and have a successful day ahead!


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