Morning Brief – Markets Await NFP Data

Markets remained in wait and see mode ahead of the Nonfarm payrolls jobs figures, with expectations for 225,000 jobs to be created by the US economy in June.

The major FX pairs are in tight ranges, with the EURUSD above 1.0900 and sterling remaining well bid above the 1.2700 level, while European stocks were marginally lower on the day.

On the data front, Industrial production in Germany unexpectedly declined by 0.2% month-over-month in May 2023, deviating from the market consensus of a flat reading and following April’s 0.3% rise.

Output decreased for basic pharmaceutical products and pharmaceutical preparations (-13.1%) as well as energy production (-7%). However, the manufacture of motor vehicles, trailers, and semi-trailers experienced a 4.9% increase.

Overall, the production of consumer goods decreased by 1.2%, and that of intermediate goods declined by 0.5%. In contrast, the production of capital goods increased by 1.3%.

Outside of the industry sector, production in construction dropped by 0.4%. On an annual basis, industrial production growth in May slowed to 0.7% from 1.7% in April.

Some minor UK data was also released during the European trading session, with the Halifax house price index falling by 0.1% month-over-month in June 2023, marking a third consecutive month of decline.

This took hold the squeeze on household finances caused by sticky inflation and ongoing policy tightening continued to exert downward pressure on housing demand.