US jobs report gets a B+
Friday’s US jobs report was (as is often the case) a mixed bag. The headline firmly beat expectations, with 222,000 jobs added in June and both May and April’s numbers revised higher. On top of this, participation in the jobs market (those who had previously been long-term unemployed and have now elected to actively look for work) rose further – which explains away any weakness read into the uptick in the unemployment rate.
Despite these somewhat bullish factors, there was a hiccup with average hourly earnings, which grew at just 0.2% on the month and 2.5% on the year – hardly the blistering, inflation-beating growth the Federal Reserve will be looking for ahead of the trigger of their quantitative tapering program. The release was relatively neutral for the US dollar – the USD index did suffer some sharp weakness initially, but the effect was short-lived as we open this morning with rates at about the middle of last week’s range for the major pairs.
May looks to make concessions
Following her appointment as prime minister, Theresa May set out some rough guidelines for the UK’s departure from the European Union: the end of free movement, leaving the Single Market and Customs Union and ending the European Court of Justice’s jurisdiction over the UK. Following the crumbling of the Conservative majority at the General Election it appears that May is now happy and ready to make concessions to opposition parties in order to ensure a smooth, orderly and well-supported passage for Brexit legislation. Reportedly, May has held informal conversations with Jeremy Corbyn among others, looking to garner support for the publication of the so-called Great Repeal Bill on Thursday.
While this cross-party accommodation will get a rise out of some of the most vehement pro-Brexit Tory MPs, it’s likely this cooperative approach to Brexit is one of the very few ways in which Brexit can realistically be achieved with the UK escaping in one piece.
G20 achieves little more than vague promises
If you listen to the despatches from each G20 world leader following the summit in Germany over the weekend, you’d be led to believe that all the world’s issues are soon to be solved and tension, conflict and disagreement are an endangered species. Trump even dubbed the summit as a “wonderful success”, with reports even suggesting that unlikely bedfellows Russia and the USA had agreed to cooperate on cyber security as well as a commitment to a very quick trade deal between the US and UK post-Brexit. Despite having the best intentions, commitments on cyber security were quickly reversed and it was pointed out that Trump lacks the constitutional authority to promise anything on trade deals. Still, makes for a good sound bite though.
Today’s a particularly quiet one on the data calendar, with the UK focusing on Wednesday’s unemployment report and the US watching Friday’s inflation data.