Daily News Report

Markets in a Flash

• The JPY has started to look strong over the past few hours gaining against the USD and other currencies.
• The USD is also looking strong against other currencies, this may as investor buy the greenback before the US’s employment report.
• US equity futures have been fluctuating this morning but are currently posting slight gains ahead of the US session.
• Most commodities are lower today ahead of the US employment data.
• Sugar has pushed higher along with some other soft commodities because of the drought in Russia.
• Overnight stocks in China closed higher, a strong session left the Shanghai index closed up +1.44%.
• The Hong Kong Hang Seng index closed its session posting gains of +0.59%
• European equity markets are pushing higher this morning. The Stoxx 600 is up and has posted a new high since April 26.

News focus

Focused on Jobs data

The main news focus for today’s trading session is the Employment data just released. This should be guiding the US equity markets and the strength of the USD in the FX markets.

AIG reports a quarterly loss

AIG, American International Group, which is almost 80% owned by the US taxpayer has reported that it has made a $2.7Bn net loss in Q2 of this year. This large loss can be mainly put down to the company having a $3.3Bn goodwill impairment. The company reported an adjusted profit figure which is up from last year and has seen the share price rise 5.3% in pre-market trading.

Just Released

0830ET – Employment Data

Nonfarm Payrolls - M/M change

Previous -125,000
Consensus Range -150,000 to 0
Consensus -70,000
Actual -131,000

Unemployment Rate – Level

Previous 9.5 %
Consensus Range 9.3 % to 9.7%
Consensus 9.6 %
Actual 9.5 %

Non-farm payrolls came in worse than consensus suggested with a larger drop than was reported last month. This drop in non-farm payrolls of -131,000 shows that the US labour market is in worse health than previously thought, this may show that the economic recovery is struggling in the worlds largest economy. This is very bearish for the markets today and should send the equity markets negative.

Coming up Today

1500ET – Consumer Credit - M/M change

Previous $-9.1Bn
Consensus $-5.0Bn
Consensus Range $-10.0Bn to $7.0Bn

Consumer credit is a measure of how much debt consumers have. A rising level of debt may be fine if economic conditions are improving as consumers will be able to repay their debt, but if the economy is declining then servicing debt may become harder. The figure last showed a $-9.1Bn decrease in consumer credit for May which is expected to be followed with a further decrease for June.