Dollar remains mixed as markets are turning the focus to employment data from US. Economists expect non-farm payroll report to show 180k growth in June with unemployment rate rose to 4.8%. Average hourly earnings are expected to show 0.2% mom rise. The ADP report showed 172k growth in private sector jobs in June, slightly up from prior month's 168k. Employment component of ISM manufacturing was back above 50 at 50.4, up from 49.2. Employment component of ISM non-manufacturing was also back above 50 at 52.7, up from 49.7. Four week moving average of initial jobless claims dropped slightly by 5k to 265k. Conference board consumer confidence rose from 92.4 to 98.0, hitting the highest level this year. Overall, the pre-NFP data suggested some solid figures this month and would likely be much better than prior month's 38k growth. One of the focuses would be whether there will be upward revision to May's figure.
Cleveland Fed president Loretta Mester said that Fed's monetary policy setting is not "behind the curve". And, "we do have time to assess conditions" including Brexit before moving with interest rates. She said that "I've been one of the more positive ones in terms of the outlook for the U.S. economy, and I continue to be positive about it. But I take on board that there is increased uncertainty". But the impact of Brexit is "going to take some time to play out" and there won't be certainty for some time. Meanwhile she maintained her optimistic forecast on the economy and expected growth to be of around 2% this year, with further decline in unemployment rate and inflation will be back to 2% over the next couple of years.
In UK, Home Secretary Theresa May and Energy Minister Andrea Leadsom are now the only two candidate left to be the next prime minister. That case after the second round of voting by the conservative lawmakers. May got 199 vote from 330 lawmakers, Leadsom got 84. Justice Secretary Michael Gove, a co-leader of the "Leave" campaign with Boris Johnson, got only 46 votes. UK is set to have the second female prime minister after Margaret Thatcher. The race for prime minister will now be open to some 150k party members and result is expected on September 9. The winner is expected to take on the job of negotiate exit out of EU after current prime minister David Cameron steps down by October.
RBNZ deputy governor Grant Spencer warned that further reduction in the OCR could "pose a risk to financial stability through their effect on credit growth and house prices." And he emphasized that "While the outlook for CPI inflation will ultimately determine the future path of monetary policy, the trade-off against financial stability risk needs to be carefully considered." Kiwi is generally higher as traders pare bet of another rate cut by RBNZ in August.
Elsewhere, Japan current account surplus narrowed to JPY 1.41T in May, labor cash earnings dropped -0.2% yoy. Swiss will release unemployment rate in European session. Germany and UK will release trade balance. US and Canada will release job data later in the day.