Weekly Market Review - September 2-6

As of late Friday, the US dollar has lost momentum against the euro and the British pound after a strong week. EUR/USD rose 0.34% over the week, while GBP/USD gained 1.12%. The Canadian dollar has been among the worst performers, losing 0.99% against the US dollar.

In the commodity market, gold and silver fell about 1% over the week on increased hopes that the US-China trade conflict will calm down.

In the cryptocurrency market, Bitcoin has gained over 8% over the week as crypto exchanges Binance and Bitfinex announced the launch of futures trading platforms and futures products.

Here are the most important economic events of the week:

Macroeconomic News

US Nonfarm Payrolls Fell Short of Expectations

The US nonfarm payrolls increased by 130,000 last month, according to Labor Department data published Friday. Economists expected the US economy to create 160,000 jobs. The unemployment rate was flat at 3.7%, pointing to almost full employment. The average hourly wages increased by 0.4% compared to July and 3.2% year-on-year. Both figures are slightly higher than economists’ estimates at 0.3% and 3.1%, respectively. In reality, the performance is even weaker as more than 20% of the job gains were thanks to hiring for 2020 census.

US House Prices Rose 1.8% in August

House prices in the US rose last month at the fastest annual pace since May. On Friday, mortgage lender Halifax said that house prices increased by 1.8% compared to August 2018, after a 1.5% year-on-year rise in July. On a side note, Halifax introduced a new methodology to measure the house prices indicator. The new reading reflecting the annual house price increase doesn’t include an average for the previous three months. In monthly terms, British house prices expanded by 0.3% after a 0.4% growth in July.

Germany’s Industrial Output Unexpectedly Decline

German industrial output declined in July despite an expected rebound. Thus, the indicator fell 0.6% on the month while economists anticipated a rise of 0.3%. The performance of the industrial sector demonstrates that German manufacturers continue to struggle and might send the country’s economy into a recession. The worst component of the indicator was the production of capital goods, which fell 1.2%. On the other side, the output of consumer goods rose 0.6%.

US Jobless Claims Slightly Rose

The number of US citizens filing applications for unemployment benefits slightly rose last week. On Thursday, the Labor Department said that initial jobless claims increased by 1,000 to 217,000 in the last week of August. Data for the previous week was revised upward to demonstrate 1,000 more applications than initially reported. Economists surveyed by Reuters expected the claims to stay flat at 215,000. The four-week moving average, which is regarded as a more accurate measure, rose last week by 1,500 to 216,250.

Eurozone’s Q2 GDP Slows

Eurozone’s economic growth slowed in the second quarter of 2019, as Germany’s GDP contracted and trade slowed. On Friday, European statistics agency Eurostat said that the economy of the 19 countries sharing the euro rose by 0.2% in the second quarter, down 50% compared to a 0.4% expansion in the previous three months. The data was in line with analysts’ expectations and Eurostat’s initial estimates. Eurozone’s trade slowed, contributing a negative 0.1% to the economy.

Germany’s Factory Orders Declined in July

Germany’s new factory orders declined in July by a seasonally-adjusted 2.7%, according to Thursday data published by Destatis. This is another indicator that the German economy is sliding towards a recession in the third quarter. Economists on average expected a decline in new orders by 1.5%. In June, the indicator rose 2.7%. The July reading fell 5.6% compared to the same period in 2018, considering real, seasonally-adjusted terms. Domestic orders declined by 0.5% on the month while export orders fell 4.2%.

Upcoming News to Watch

This Sunday, Japan will publish data on economic growth for the second quarter in both quarterly and annual terms.

On Monday, the UK will also report on its gross domestic product. Besides, the UK will release data on industrial production, manufacturing production, and trade balance.

On Thursday, the European Central Bank (ECB) will meet to decide its interest rate and monetary policy. ECB president Mario Draghi will hold a speech afterwards. Elsewhere, the US will release a series of important economic updates, including the consumer price index (CPI) and initial jobless claims.

The week will end with retail sales data from the US. Markets in South Korea and China will be closed on the Full Moon Festival (which starts Thursday) and Mid-Autumn Festival, respectively.

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