Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:
Main Trading Event Of The Day: U.S. Unemployment Claims @ 12.30 GMT
WHAT WE’RE WATCHING TODAY
Jobless Claims Likely To Remain Low Reflecting Improved Labour Market
The U.S. economy is adding jobs at the fastest pace in years and layoffs remain extremely low so the latest weekly report on jobless claims is unlikely to show any deviation in those trends. Economists are projecting initial claims will rise to 320,000 in the seven days ended July 5 from 315,000 in the prior week. The number of people filing new applications for unemployment benefits each week has ranged between 298,000 and 327,000 since early May, keeping claims at or near a post-recession low. It is worth bearing in mind that the claims figures for July can, however, be tricky to evaluate since it’s one of the most volatile months of the year. The July 4 holiday can also skew the report while some major manufacturers such as car makers often retool plants in midsummer. The retooling sometimes leads to a temporary bump in applications for benefits, though auto makers may be less inclined to shut down this year amid surging demand for new vehicles.
U.S. Unemployment Claims today @ 12.30 GMT.
Europe Stocks Higher On Fed Meeting Minutes
European stocks are expected to open higher today after traders were reassured that the U.S. Federal Reserve will move slowly to raise interest rates. The FTSE is expected to open 4 points higher, the DAX 16 points higher and the CAC 40 up 5 points. The minutes from the Federal Reserve’s Open Market Committee suggested its asset-buying program, also known as quantitative easing, will likely end in October. U.S. markets showed measured reaction to the news, with stocks adding to modest gains and government bond yields slightly lower after the two-year note momentarily touched a three-year high. In Asia, stocks traded mixed following weak Chinese trade data. Exports rose 7.2 percent on year, missing estimates for a 10.6 percent increase. Imports rose 5.5 percent, against expectations for a 5.8 percent increase, leaving the country with a $31.6 billion trade surplus. The Bank of England is also scheduled to release its latest monetary policy decision today and is expected to leave rates on hold at a record low of 0.5 percent.
The New Zealand Dollar Continues To Shine
The NZD was trading around $0.8820 today, just short of its post float all-time high of $0.8842 hit on August 1 2011, boosted by the move by credit rating agency Fitch to reaffirm the country’s AA rating and upgrade its outlook to positive from stable on Tuesday. The NZD has been on fire since mid-2013 and looks unstoppable according to analysts. As one of the only two currencies with any appreciable yield in the advanced industrialised world, the kiwi has been the darling of the yield chasers and the upgrade by Fitch will only serve to reinforce its strength. New Zealand raised interest rates three times this year to reach 3.25 percent. It is the only developed economy tightening monetary policy. Many analysts expect a fourth rate hike this month, and the central bank pledged earlier this year to raise rates by 225 basis points over the next two years. The country’s hawkish monetary policy and strong economic fundamentals helped fuel its 14 percent rise against the dollar since mid-last year, while investors’ hunger for high yielding currencies also contributed to strength. Although some analysts flagged the possibility that currency strength could make New Zealand’s exports less attractive, most agree that the bank is unlikely to change course on its monetary policy. Much of the strength in the kiwi comes from the low volatility, yield seeking environment.
That sums up today’s highlights! Remember to keep in touch via our Facebook, Twitter, LinkedIn and Google+ pages for all the latest trading updates. We hope you have a profitable day on the markets.
