Market Movers
Today's key data release is the US employment report for June (note that this is out on a Thursday due to the US bank holiday tomorrow ahead of 4 July). As long as there is no important news out of Greece, the market is likely to at least temporarily focus on fundamentals.
We estimate that non-farm payrolls increased 230,000 in June driven by gains in service sector employment and construction (see US Labour Market Monitor: Tighter labour market to prompt September rate hike , 29 June 2015. However, the jump in the employment component in yesterday's ISM manufacturing survey coupled with the improvement in the Conference Board's measure on the labour market suggest some upside risks to our forecast. This pace of job growth is in our view sufficient to justify a first Fed funds rate hike in September conditioned developments in Greece.
The gauge on wage inflation, the average hourly earnings index, will also be important. This measure of wage inflation has been lagging behind the employment cost index and as highlighted by NY Fed President Dudley Friday, higher wage inflation will make the FOMC more confident in the inflation outlook.
Riksbank policy decision is due: we look for unchanged policy measures but see risk of a rate cut.
To Read the Entire Report Please Click on the pdf File Below