Aussie is mildly lower against the greenback today after release of employment data. The job market grew 38.5k in July, much better than expectation of 13.9k. 12.4k full time jobs and 26.1k part time jobs were added. However, unemployment rose to 6.3% versus expectation of 6.0% as more people entered the job market. The participation rate jumped from 64.8% to 65.1%. Some economists noted that while the headline growth number was positive, the high unemployment rate should be treated with caution as it's usually consistent with sub-trend growth and weak demand. AUD/USD recovered earlier this week after RBA left interest rate unchanged at 2.00% and issued a rather neutral statement. Nonetheless, technically, AUD/USD is held below 0.7448 resistance and thus maintained a near term bearish outlook.
BoE rate decision will be the main focus today, together with the minutes and press conference. Of the same importance is the quarterly inflation report which would also be released too. We do not expect any change in the monetary policy this month. Yet, it is critical to gauge the guidance by governor Mark Carney who has noted more than once that a rate hike should be carried out by the year-end. We are also interested to see the voting result which might show one more two members opting for a rate hike. UK will also release production data while Eurozone will release retail PMI and German factory orders. Swiss will release SECO consumer confidence.
Later in the data, US will release Challenger job cuts and jobless claims. The main focus, though, will be on tomorrow's non-farm payroll report. The greenback was under some pressure yesterday after ADP employment missed expectations. But it regained some strength on much stronger than expected ISM non-manufacturing. The services index improved notably to 60.3 in July, up from 56.0. That's the highest reading since August 2005. Also, the employment component jumped sharply to 59.6, up fro 52.7.