A rash of non-farm payroll data (NPR) from the US pushed the dollar higher earlier. The US economy absorbed more than 220,000 jobs in June according to new numbers from the US Bureau of Labour.
However checking the dollar’s recovery was a yet-to-arrive substantial improvement in wage growth. Hourly earnings improved by just 0.2% in June. But the better NPR numbers overall are expected to give an amber light to more US Fed rate hikes.
The effect on currencies? At 4pm today sterling had plunged almost 0.70% to $1.2881 while the euro was playing it cooler, down -0.27% to $1.1392. Overall the pound is down -1.10% on the week overall, not helped additionally by weaker UK factory output numbers emerging this morning.
The FTSE 100 closed up 13 points tonight at 7,350.92 with easyJet soaring more than 5% to 1,347p, helped by a new plunge in oil prices, down -3.54%. Centrica and Rolls Royce Holdings climbed 2.82% and 2.08%. Royal Mail though fell more than 3% to 424.50p.
- UK FTSE 100 7,350.92 +0.19%
- Dow 21,381.31 +0.29%
- S&P 500 2,418.80 +0.38%
- Nasdaq 6,132.57 +0.72%
- Nikkei 225 19,929.09 -0.32%
- DAX 12,371.84 -0.08%
- CAC 40 5,137.87 -0.30%
- Gold 1,213.80 -0.78%
- Oil WTI 43.91 -3.54%
UK productivity stutters
A rash of unflattering UK data today including a widening trade deficit. But let’s touch on the frailer UK factory and construction firm data. The Office of National Statistics claims vehicle production saw its largest slip for 12 months with output down -4.4%.
Just as worryingly, overall industrial output fell 0.1% when a rise of around 0.4% looked more or less on the cards. The weaker numbers will add pressure on the Bank of England to resist hiking interest rates in the short term – a nod possibly to 2018 instead.
"Given the soft data this week, I think a U.K. rate hike is increasingly becoming a 2018 story," Viraj Patel, FX strategist at ING in London, told Reuters.
New VW Group 'dieselgate' arrrest
Elsewhere Munich prosecutors have arrested an Audi manager – the first German arrest relating to VW’s disastrous emissions-cheating software scandal. It’s not known for certain if the Audi manager is a current employee.
However an ex-manager of thermodynamics for Audi, Giovanni Pamio, has been arrested; a Bloomberg report claims Pamio’s arrest was not made at the request of US authorities.
In theory Pamio, an Italian living in Germany, could be extradited from Germany to the US. The US Justice Department filing on Pamio’s arrest is here. VW’s share price has plunged 45% since early April 2015 when the ‘dieselgate’ scandal became public knowledge.
Breaking news: President Trump and President Putin both claim they want to improve US-Russian ties at the G20 Hamburg summit.