The US financial markets were closed for the July 4th weekend holiday yesterday, ensuring other indices around the world were cautious and with low volume. The next important release that could potentially create volatility in the markets is the June Jobs Report.
Last week world indices increased gains and closed higher on a falling US dollar, rising treasury yields, and the Greek government adopting austerity measures.
Earlier in the year, job reports were consistently above 200,000 being added each reporting period. It is expected that the June report will only be 100,000. One of the reasons for a bounce in markets this week was the increase in pending homes sales in the US, the Chicago purchasing managers report and the national ISM manufacturing index, all increasing since past reporting periods.
Global head of G-10 foreign exchange strategy at Nomura Securities commented: “I think the most important thing will be the U.S. data that comes out. If we get further confirmation there’s this bounce going on, I think that’s going to be the dominating force. If you look at global markets broadly, one of the things that’s important is we had a mega rally in rates, including in countries where central bankers are on a tightening path.”