Article Highlights

  • U.S. preliminary non-farm productivity down 0.5% vs. projected 0.5% gain
  • U.S. unit labor costs up 2.0% vs. 1.8% forecast
  • U.S. IBD/TIPP Economic Optimism index up from 45.5 to 48.4
  • U.S. wholesale inventories up 0.3% vs. estimated flat reading
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Rally and reverse! The Greenback was off to a strong start in the U.S. session but quickly erased its recent gains and more.

Major Events:

Medium-tier U.S. data – There were no major reports out of the U.S. economy yesterday but these medium-tier releases are still worth taking note of. Preliminary non-farm productivity fell 0.5% in Q2 versus the projected 0.5% increase while unit labor costs rose 2.0% versus the 1.8% forecast, both putting upside pressure on overall inflatoin.

Meanwhile, the IBD/TIPP Economic Optimism index chalked up a strong climb from 45.5 to 48.4, outpacing the consensus at 46.2 and indicating a lower degree of pessimism. Wholesale inventories rose by 0.3% instead of staying flat, suggesting that businesses might not need to ramp up production just yet because stockpiles haven’t gotten depleted.

Crude oil outlook report – A report released by the U.S. Energy Information Administration showed an upward revision in this year’s oil demand and a downgrade for next year. The agency predicts that oil demand for 2016 would rise by 10,000 barrels per day to 1.45 million while cutting demand growth for 2017 by 40,000 barrels per day. WTI crude oil edged lower to $42.76/barrel upon hearing the news.

Major Currency Movers:

USD – The Greenback ended mostly lower against its peers as dollar bulls were unable to sustain the post-NFP hype.

USD/JPY fell from 102.28 to close at 101.92 (-0.35%), EUR/USD started off at 1.1085 then climbed up to a high of 1.1115 (+0.27%), GBP/USD dipped to a low of 1.2955 before recovering to 1.3004 (+0.38%), USD/CHF found resistance near .9850 then slipped to .9817 (-0.35%), and USD/CAD fell from 1.3152 to 1.3122 (-0.23%).

Watch Out For:

  • 12:30 am GMT: Australia Westpac consumer sentiment
  • 1:30 am GMT: Australian home loans (2.4% expected, -1.0% previous)
  • 3:00 am GMT: RBA Governor Stevens’ testimony
  • 4:30 am GMT: Japanese tertiary industry activity index (0.3% expected, -0.7% previous)

See also:

Asian Session Recap

London Session Recap

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