The major event driving the dollar in the prior week was US employment data which barely missed expectations of 224,000 jobs added, printing at 223,000. The unemployment rate fell to 5.40% just as labor force participation hit a new multi-decade low. Aside from the employment data, comments from Janet Yellen sent stocks lower as her remarks on valuation dented optimism in the recent bull market. However, other speeches from FOMC members have underlined the possibility of a September rate hike. Greece continued to await a consensus from creditors who were squabbling over possible haircuts and terms of releasing further bailout funds. The Tuesday IMF repayment looms large if the groups cannot reach a compromise today. However, in positive momentum for the monetary union, the European Commission upgraded regional growth forecasts after seeing a broad improvement in services and manufacturing data. In Asia, the broadening slowdown in China continues to spread with the HSBC manufacturing PMI steady below the expansionary threshold as both imports and exports tumble. Neighboring Australia moved to cut rates by 0.25% to 2.00% in order to combat disinflation and persistent weakness in the commodity sector.
Payroll Miss Sees Market Optimism Persist
Weekly Report - 11/05/2015