Is it too early to become relieved by Spain's job numbers?
The number of unemployed in Spain at the end of June 2013, according to data from the records of the Public Employment Service, has dropped by 127,248 versus the previous month. The reduction is 2.60%. The fall in trend started in March and has now continued for four consecutive months of steady decline. This reduction is in fact historically the largest ever recorded in the series. However, there are caveats with this welcome reduction…
Firstly, seasonally job availability in Spain often pushes the numbers up during the start of the summer season. Therefore the majority of the positions filled will be temporary. Secondly, once you reach the bottom of a series of data it's not uncommon to experience a bounce, a 'dead cat' bounce. When we consider that Spain has circa 56% youth unemployment then the road ahead, to attempt to get what is en masse a well educated, young, motivated workforce, into gainful full time employment, looks long and daunting.
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UK construction companies indicated a moderate rise in business activity during June. This was highlighted by the seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) posting 51.0, up fractionally from 50.8 in May and above the 50.0 no-change value for the second month running. The latest reading was the strongest since May 2012. Higher output levels were driven by a solid rate of new order growth in June, and this in turn contributed to rising employment levels in the construction sector during the latest survey period.
As anticipated the RBA, the central bank of Australia, kept their base rate out of step with that of many major developed economies at 2.75%. Despite the belief amongst many analysts that many of the Aussie pairs have been oversold the impact on AUD/USD has been minimal, when price is plotted on a daily chart.
Attention in the financial mainstream media may turn to the troika visiting Greece for a three day summit to evaluate whether or not the Greek government have followed the rules and demands laid down by the troika in order that Greece can receive the next tranche of its bailout, circa €8 billion. The suspicion is that the latest tranche will be segmented by a 'carrot and stick' method into two unequal parts, with the stick being more prevalent than the carrot.
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Market snapshot at 10:45 am (UK time)
Looking at European bourses firstly the UK FTSE is down by 0.29%. The CAC is down by 0.56%, the DAX is down by 0.77% whilst the Athens exchange is down by 0.84%. However, the ASE has grown 39% year on year. The DJIA equity index future is currently printing up 0.28% suggesting that the DJIA will open positively after the New York bell.
Spot gold is up 0.78% at 1262, spot silver is up 0.63%, copper is down 0.21%. WTI Oil is up 0.26% meaning that oil is currently at 98.28 quoted on the ICE exchange. Brent crude is currently at 103 per barrel up 0.22%.
The dollar has risen marginally versus the Loonie (Canadian dollar) up 0.16% at the time of writing. USD is up 0.25% versus the euro and 0.11% versus sterling. USD is up 0.25% versus the Swissie. The greenback is also up marginally versus yen by 0.05% and by 0.52% versus the Aussie.