In the first week of the year, the attention of the market has been focused on the bullish trend of the euro-US dollar currency pair.
EUR / USD continued to rise beyond 1,06 but failed to ride the wave and went back in the last session on Friday, closing near the opening level of Monday (1,04).
Everything revolved around the data of the Non Farm Payroll and labor market of United States, expecting a possible moment of weakness for US dollar. However, Friday’s publication has curbed the minds and the greenback has been strong enough to regain control of the situation.
The Non-farm Payrolls in the US in December fell short of analysts’ expectations. Last month the new jobs added to the US economy were 156.000, against 204.000 of the previous month. Experts had predicted that the most important market mover for the dollar would have scored 178.000 jobs, but this did not happen.
The US unemployment rate stood at 4,7% in the month of December, in line with analysts’ forecasts.
The monthly average hourly wage scored +0,4%, compared with a consensus of 0,3% and a previous data at -0,1%.
The growth of +0,4% in the average monthly wage and the unemployment rate completed a picture that has allowed the US dollar to strengthen and recover from its negative days.
It has not occurred therefore the long-awaited reversal either on other currency pairs or safe haven assets. The US labor market is fairly stable and the Federal Reserve is concerned but ready to act in the coming months.
In this week were also published the PMI index on services of United States and United Kingdom and retail sales in the Euro zone.
The PMI Markit index of United States services rose to 53,9. The consensus of the analysts and the previous data (53,4) was exceeded.
Also in the United Kingdom, the service sector improved more than expected in December, reaching the maximum of August 2015. The PMI index of the services for the United Kingdom marked an unexpected increase to 56,2, against the result of the previous month of 55,2.
Retail sales in the Euro zone fell by 0,4%, compared with a +1,4% recorded in the previous month. The figure was in line with analysts’ expectations.
On an annual basis, Euro zone retail sales stood at 2,3%, compared with a previous figure of + 3,0%.
The week just started begins with the publication of several important market movers, such as the Italian unemployment rate of November 2016, the German data on industrial production, the trade balance and the Chinese consumer and producer price indices.
On Wednesday there will be the European Central Bank non-monetary policy meeting and in the afternoon the long-awaited estimate GDP of the United Kingdom for the third quarter of 2016 (after Brexit).
On Thursday, the European Central Bank will publish the minutes of the meeting regarding the monetary policy decisions and Friday 13 (baleful day for Americans) there will be the speech of Federal Reserve’s Chairman Janet Yellen.