The increase in non-agricultural employment in the U.S. announced last Friday was slightly better than market expectations. The number of jobs increased by 1.76 million and the unemployment rate fell to 10.2%. The U.S. job market continued to rebound after the economy restarted, and the U.S. stock market suffered Positive employment data encourages to continue higher. However, from the perspective of the currency market, investor optimism has been reduced, the US dollar has shown signs of rebound, and commodity currencies and gold prices have fallen under pressure. On the one hand, the implementation of the US government’s new crown aid fund plan has been blocked, and on the other hand, the tension between China and the United States has further escalated, which may lead to a rise in the recent risk-off transaction sentiment. In addition, some important economic data this week will give the specific conditions of economic recovery in various countries after the economic restart, which is an important factor in the direction of long-term transactions.
U.S. economic data
Some important U.S. economic data this week mainly include the U.S. Consumer Price Index (CPI) in July on Wednesday and Friday’s retail sales data. Affected by the continued decline in the U.S. dollar, the market expects that CPI data in July will show a sustained rebound. This data recorded an increase of 0.2% and returned to positive after shrinking for three consecutive months after the lockdown due to the epidemic. In addition, Friday’s retail data may continue to improve. The US retail industry has shown a sharp rebound after May, shrinking from April to -17.2%, V-shaped reversal to May’s growth of 12.4%, and June’s data is an increase of 7.3 %, we may see growth in July, but the momentum may be greatly weakened.
China Economic Data
Several important economic data of China will be released this Friday, including: industrial production data, fixed asset investment, retail data and unemployment rate. The above data are all annual ratios. Since March, various data in China have rebounded flexibly. Fixed asset investment expectations still show a negative range this time, but the degree of shrinkage is significantly reduced. This time the expected value is down 1.6%. The same data in March is down 24.5. %. At the same time, retail sales data is expected to return to the positive range for the first time since February, with March data falling by 20.5%. Industrial production data will rise to more than 5%, while the unemployment rate is expected to drop to 5.7%. China’s data will have a direct impact on the currencies and stock markets of commodity exporting countries.
New Zealand’s central bank discusses interest rates
Since the economic closure in May, various economic data in New Zealand showed that the economy rebounded rapidly. The employment data in the second quarter was better than market expectations, and the unemployment rate fell to 4%. However, since the number of job seekers has greatly decreased during the lockdown period, the real situation of the data may be affected. In addition, government subsidies will be suspended in the third quarter, and the unemployment rate is expected to rise in the second half of the year. Although the central bank’s decision is not expected to further reduce interest rates to zero or a negative range, it may adjust the scale and expiry time of quantitative easing to support the New Zealand economy. The New Zealand currency may weaken significantly this week.
Australia employment data for July
Also after the restart of the economy, Australia’s employment population increased significantly in June, recording 210.8 thousand new jobs. However, affected by the rebound of the second epidemic, the data in July is expected to slow down significantly, and the unemployment rate may continue to rise to close to 8. %s level. The Australian dollar as a typical commodity currency may be suppressed by risk factors, and there is a possibility of a technical fall this week.
CMC Markets US Dollar Index- Daily Chart
Looking at the daily chart, the US dollar index has a clear technical bottoming pattern-the bottom stop hammer + positive pillar, and it breaks through the downward trend line, which means the end of this down market. The target for further rebound in the near future is to see the middle track of the Polyga Channel and the 61.80% reverberation line. The specific price is near the 1000 integer mark. Immediately, the oscillating indicators also showed a bottom rebound, especially when Stoch appeared a potential “buy up” signal of a golden cross in the oversold area. However, the general downward trend determined by fundamentals has not completely changed. The recent rebound may be a short-term market. The near-term support below focuses on the low of last week near 990.
Investing in derivatives has great risks and is not suitable for all investors. The loss may exceed your initial investment. You do not own the underlying assets and related rights and interests. We recommend that you consult independent consultants to ensure that you fully understand the risks that may be involved before trading. This review only provides general information and does not take into account your specific goals, needs, and financial situation. Therefore, when you decide to trade or continue to hold any derivative products, you should consider your personal goals, needs, and financial conditions. For Australia and New Zealand, the relevant product disclosure statements can be obtained on our website cmcmarkets.com/zh/legal. CMC Markets Asia Pacific Pty Ltd (ACN 100 058 213), AFSL No. 238054, the CFD issuer.