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The first week of August resulted in a mixed picture for currencies, mirroring the mixed NFP report. Dennis Lockhart speech, German ZEW Economic Sentiment, UK Jobs data, US Retail sales, Unemployment claims, German GDP data US PPI, Consumer sentiment are the forex highlights for this week. Join us as we explore the major events coming our way.

Non-Farm Payrolls showed a  solid gain of 215,000 positions, indicating the US employment is on the right track. Lower  than expected jobs increase were met with OK wages,  an unchanged unemployment rate and basically little surprises. According to some, this gives a  green light for the Fed to raise rates in September. However, September rate hike is not a sure thing. Low inflation cools growth and may postpone the Fed’s longed for  decision. Elsewhere, the pound got a blow from the BOE, the Aussie got some positive data and the euro remained stable.  Let’s start:

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  1. Dennis Lockhart speaks: Sunday, 16:25. Federal Reserve Bank of Atlanta President Dennis Lockhart will speak in Atlanta. By calling the Fed to hike rates Lockhart gave a clear sign that the Fed is preparing for a policy shift. Market volatility is expected.
  2. German ZEW Economic Sentiment: Tuesday, 9:00. German analysts’ sentiment weakened in July to 29.7 from 31.5 in June. The reading was lower than the 30.6 estimated by economists. Current conditions edged up to 63.9 points from 62.9 points in June. Economic sentiment declined to the lowest level in eight months amid, the Greek debt crisis and weaker than expected industry data. Meanwhile, euro zone economic sentiment  fell to a seven-month low of 42.7 in July from 53.7 in June. Sentiment is expected to rise to 31.1 this time.
  3. UK Employment data: Wednesday, 8:30. The number of people claiming unemployment benefit in June increased by 7,000 to 804,200, contrary to analysts’ forecast of a 8,900 decline. However, wages continued to increase. Average weekly earnings including bonuses edged up at an annual pace of 3.2% between April to June, and by 2.8% excluding bonuses, the fastest rate in five years. June’s setback suggests the UK’s recovery is still fragile and more measures are required to boost growth. The number of job seekers is expected to grow by 2,100.
  4. US  JOLTS Job Openings: Wednesday, 14:00. This is a data point for June, contrary to July’s NFP. Nevertheless, it has a significant impact as the Fed looks at it quite closely. After hitting 5.36 million in May, another advance to 5.42 million is on the cards now.
  5. US Retail sales: Thursday, 12:30. U.S. retail sales unexpectedly declined in June amid a slowdown in purchases of automobiles and other goods. Retail sales contracted 0.3% the worst reading since February, following May’s revised rise of 1.0%. Excluding automobiles, gasoline, building materials and food services, retail sales declined 0.1% after a 0.7% increase in May. Other disappointing data such as Jun’s employment report and the fall in business confidence suggest the US recovery might have stalled in June. This could impact the Fed’s rate hike decision in September. U.S. retail sales is expected to grow by 0.5% , while core sales are expected to gain 0.4% in July.
  6. US Unemployment claims: Thursday, 12:30. The number of Americans filing initial claims for unemployment benefits rose by  3,000 to a seasonally adjusted 270,000 last week, broadly within market forecast. Meanwhile, the four-week moving average for new claims declined by 6,500 claims to 268,250. Continuing jobless claims fell by 14,000 to a seasonally adjusted 2.26 million during last week. The number of jobless claims is expected to reach 272,000.
  7. German GDP data: Friday, 6:00. Germany’s economy expanded 0.3% in the first quarter after a 0.7% gain in the previous three months. Analysts expected a higher growth rate of 0.5%. A slowdown in global trade and weaker consumer spending caused this decline. Meanwhile the Euro-Area growth quickened more than expected in the first quarter, rising 0.4% with France outperforming Germany with a 0.6% expansion rate. Germany is expected to expand by 0.5% in the second quarter.
  8. US PPI: Friday, 12:30. U.S. producer prices climbed more than expected in June amid a rebound in gasoline prices and a rise in other goods. Producer prices increased 0.4% following a 0.5% gain in the previous month indicating the manufacturing sector is stabilizing and inflation strengthens. In the 12 months through June, PPI declined 0.7% after dropping 1.1% in May. Meanwhile, core PPI edged up 0.3% following a 0.1% decline in the prior month. PPI is expected to rise by 0.1% this time.
  9. US UoM Consumer Sentiment: Friday, 14:00. U.S. consumer moral declined more than expected in July, falling to 93.3 from 96.1 in June. The reading was below market forecast of 96 points. Consumer outlook declined to 85.2 from 87.8 from the prior month. Inflation expectation edged up to 2.8% from the prior 2.7%, while the survey’s five-to-10-year inflation outlook was at 2.7% from 2.6%in the previous month. U.S. consumer sentiment is expected to reach 93.5 in August.

That’s it for the major events this week. Stay tuned for coverage on specific currencies

*All times are GMT.

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