UK: More soft data from the UK as My Industrial and Construction output drop causing the pound to reverse Thursday’s gains and EUR/GBP is currently trading above 88p level. UK Manufacturing output printed -0.2% verses expected increase of 0.5%. The NIESR GDP estimate is due for release at 1pm today and will be closely watched by markets.
Further woes for sterling as business leaders in the UK threaten to derail Brexit by demanding Britain stays in the Single Market and Customs Union and put pressure on the Brexit Secreray David Davis.
US: We also get the June release of non-farm payrolls (NFP) from the US at 1.30pm, with the market looking for jobs of 178k and the unemployment rate holding at 4.3%. A strong print in wages will be supportive for the Fed’s view that inflation weakness is transitory and should support yields in the USD. A soft release however, will lead to further EURO gains a test of the recent highs with 1.1445 and 1.1500 likely.
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