The number of people filing for unemployment benefits in the United States last week rose more than expected, fresh figures from the Department of Labor revealed on Thursday. Initial jobless claims grew by 14,000 to 266,000 in the week ended July 23, compared to the previous week’s revised figure of 252,000, while market analysts expected jobless claims to rise by 9,000 to 261,000 in the reported week.
Credit Suisse posted a net profit of 170 million SFr, compared to 1.05 Billion in the same quarter last year. Nevertheless, it is better than the analyst consensus who expected a deepening of the yearly losses.
The good:
Costs were 8% below consensus. One of Thiam’s priority is to make the bank run more efficiently, and this is the first time we witness that his strategy is finally bearing fruit. The company is on track to meet its cost cutting target for the year of 1.7 billion francs. Wealth management, the other priority, also managed to continue attracting funds with Net New Assets up 5.4 Billion francs, despite the geo-political challenges in Europe. This is clearly helped by Credit Suisse’s global footprint.
The markets have been all over the place since the Brexit vote. However, this rases opportunities on the currency market, even in a context of high volatility. We could observe a US dollar acting as a safe haven in the wake of the vote, and still resilient during the rising markets that followed.
The unemployment rate in the UK fell to its lowest level in more than a decade in May, a sign the labor market continued to strengthen in the run-up to Britain’s referendum on membership of the European Union, while average weekly earnings edged up in the same month. The unemployment rate in the UK came in at 4.9% in the fifth month of the year, unaffected by the Brexit fears before the referendum. The unemployment rate in the UK measured on a three months moving average basis, therefore, fell below the level of the natural, or non-inflationary, unemployment level of 5.0% estimated by the Bank of England.
The pound is enjoying a welcome relief-rally from oversold extremes. It follows the historic post-Brexit -15% cliff-drop, which pushed into the lowest levels since 1985. Since then, sentiment has mildly improved as the announcement of a new British prime minister removes a layer of political uncertainty. Furthermore, this week’s expected rate cut from the Bank of England is also likely to offer additional respite.
Pair’s Outlook
The yellow metal fell on Monday, as it started day’s trading session at 1,367.53 and ended Monday’s trading at 1,354.86. Although, it was the fourth consecutive session, when the bullion had reached above the 1,370 level, it seems to have finally rebounded, as the metal is now trading below the weekly PP at 1,358.76. If gold moves lower, it is set to meet the weekly S1 at 1,342.44, against which it might rebound and continue its streak of gains.
UK manufacturing and industrial production data came in ahead of expectations for May, with both figures a big beat on the forecasts of economists. Manufacturing production decreased 0.5% on a monthly basis in May, down from April when it rebounded 2.3%, while the indicator came in at 1.7% on a yearly basis in the same month. Both readings beat the estimates of -1.2% and 0.6%, respectively. Overall industrial output fell 0.5% on a monthly basis in May, after a revised rebound of 2.1% seen in April. The reading did, however, beat the forecast of a negative 1.0%. On an annual basis, the gauge rebounded 1.4% in the fifth month of the year, while markets had bet on a 0.5% advance in the reported month. Industrial and manufacturing production show the volume of production in the UK’s industrial and manufacturing sector, and the indicators have been volatile since the beginning of the year.
After nearly seven years from the end of the deepest global financial crisis of the postwar period, growth continues to be slow and uneven in advanced countries and falling in most emerging markets. There is even the risk that the world may be drifting toward a new global financial crisis.
