Saturday June 27, 2015 - 11:09:48 GMT
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Focus on Greece and U.S. Jobs: WEEK AHEAD
John M. Bland
U.S. Focus Remains on Job Creation
The upcoming week will be cut short by the U.S. Independence Day (July 4) observation on July 3. The Friday holiday has seen the release of June U.S. employment data moved ahead one day to Thursday, July 2. The Employment report is always the most important release of the month because the internal data serve as the basis for many of the economic forecasts made for over the month. Every employment report has also become a key indicator for the Fed about when the economy will be strong enough to start to "normalize monetary policy. We feel the Fed would like to see monthly job increases of 200K or above and a steady improvement in average hourly earnings. The jobs growth has been there but incomes have been slow to recover. Street estimates are for a increase in June jobs of +224K (vs. +280K in May). A strong report would strengthen the case for a September interest rate lift-off.
Eleventh Hour For Greece
Not unexpectedly, Greece debt talks have no reached the eleventh hour. In these types of discussions it is not unusual for either side to engage in brinkmanship to extract as much as it can from the other side. The current Greek government was elected on a promise of no more austerity while the other side features a number of players looking for a lasting solution that would require structural changes in Greece that would certainly involve more austerity. Germany is requiring that a deal be approved by the Greek Parliament before the German Parliament considers a deal on Monday. If there is no deal, Greece will go into default on its debt.
Late Friday night in Greece, PM Tsipras announced there would be a national referendum on the proposals presented by creditors on July 5. This iiis after the June 30 date when an IMF payment is due, but I feel the creditors will have no choice but to let the vote take place.
The upcoming week is a busy one for key economic data.
-- Monday, June 29, sees German Retail sales and flash CPI data for June. Also U.S. Pending Homes Sales are due.
-- Tuesday June 30, features the release of German Employment data, UK GDP and Eurozone flash CPI figures. Canada releases imonthly GDP data while the U.S. will see the Chicago PMI and the Conference Board Consumer Confidence Survey.
-- Wednesday July 1, Sees the Quarterly Japanese Tankan Survey and a slew of final June manufacturing PMI releases. The U.S. will also see the June ADP Private payrolls estimate.
-- Thursday July 2, will see the June UK Construction PMI report, the latest ECB meeting Minutes and the critical June U.S. Employment Report.
-- Friday July 3, sees the Observance of the U.S. Independence Day Holiday and a number of final Service PMI's.
Be sure to refer daily Global-View to see the continuously UPDATED Economic Calendar and the Forex Forum for the complete list of key items (actual data, selected charts, etc.) as they are released.
John M. Bland
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