Friday’s US Labour Market Report was the standout macro data release from last week with the US economy creating an impressive 943,000 new jobs during July. Figures for the previous two months were also upgraded with the leisure and hospitality sectors seeing material employment gains. This resulted in a significant drop in the headline unemployment rate which fell by an impressive 50 basis points (bps) to 5.4% to the lowest level for 16 months. Wages also increased at an annualised +4.0% a 30bp acceleration on the prior month.
Global equity markets enjoyed a strong week with US indexes continuing to push into record territory. The S&P500 added +0.9%, reversing early week loses with financials with banking shares benefitting from a pickup in longer term interest rates later in the week. Rising optimism helped to lift markets across Europe. In the UK, the FTSE100 rose by +1.3% whilst across the Channel, French shares were noticeably strong with the CAC40 advancing by +3.1%. Meanwhile in Japan, broad based gains were seen in the Nikkei 225 which posted a weekly rise of +2.0%.
Increased sovereign bond yields were seen across the curve as investors digested the impressive US jobs report. Both the 10-year US Treasury and UK Gilt yield rose by 5 basis points over the previous week, the former to 1.29% and the latter to 0.61%. The benchmark Eurozone 10-year index remained unchanged at -0.54%.
In the commodity markets, oil prices endured a challenging week as traders took note of the rapid spread of the delta variant of COVID-19. Fears of what this could do to demand if people are once again prevented from travel contributing to a sharp -7.6% drop in the price of Brent Crude which fell to $70.66 a barrel. The gold price also retreated sharply, impacted by higher rates and last week’s climb of the US dollar. The precious metal declined by -3.3% to $1,764 an ounce.
Thursday’s preliminary reading of Q2’21 GDP is the standout figure from the UK with industrial and manufacturing production figures also due. On Tuesday, the British Retail Consortium publishes its monthly sales report with further strong annualised growth expected to be reported. In the US, CPI inflation (released Wednesday) is expected to have accelerated again last month. Friday’s closely monitored University of Michigan Consumer Sentiment indicator will provide an insight into the current confidence levels amongst Americans.
In the Eurozone, economic sentiment data is due from economic research institute ZEW with industrial production the other figure of note set to be published this week. Moving to Asia, inflation figures have already been released in China with the headline index rising by 20bps to 1.0% last month. Foreign direct investment numbers are published later in the week. There are no headline macro figures due from Japan on this occasion.
Read last week's market update
Market data: FE Analytics
 Forex Factory, 1 August 2021
 T. Rowe Price, 6 August 2021
 Forex Factory 8 August 2021
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