Moribund trading activity
It was a lackluster trading session in Asia, with traders sandwiched between yesterday’s Independence Day holiday and tonight’s US employment report. Indices were little changed and movements in the currency markets were kept to a minimum.
AUD/USD continues to wrestle with the 100-dfay moving average at 0.7032 having once again failed to close above it for the second day running yesterday. The 200-day moving average at 0.7098 and possible trendline resistance at 0.7110 lurk above. However, AUD/USD looks poised for its third weekly gain in a row, despite a couple of interest rate cuts by the RBA, and touched the highest since May 7 yesterday.
AUD/USD Daily Chart
China holding back?
Before the next phase of renewed trade negotiations between the US and China, the Asian nation has said that it is seeking clarity on the Huawei situation before committing to purchasing more US agricultural products. Last weekend, US President Trump said he would allow US companies to sell their (non-sensitive) equipment and that China would resume purchases of some US farm products. On Tuesday, White House Trade Advisor Navarro stated that the US position on Huawei and 5G networks had not changed since the G-20 summit. Let’s see how things progress next week.
Monthly lottery
It’s time for the monthly nonfarm payroll lottery, with analysts hoping for a strong rebound from last month’s disappointing 75,000 jobs added. Estimates suggest 160,000 jobs were added to the US economy in June, with forecasts ranging from 100,000 to 220,000. Such an outcome would be below the six-month average of 175,000, which has been on a downward track for the last two months.
Accompanying the payrolls report, unemployment is seen unchanged at 3.6% with a mild uptick in average hourly earnings to +0.3% m/m from +0.2% in May.
Canada also reports its employment data for June with expectations for another increase of 10,000 jobs in the economy. This would be the third month in a row that jobs were added on a net basis.
