Today is the day when the much-awaited report from the US will be unveiled. Following two very robust months, US nonfarm payrolls is expected to register a slightly smaller increase for August. In July, hiring strength was high in business services and the leisure & hospitality sector, while government payrolls also picked up in recent months. It is likely that hiring in leisure & hospitality and business services slowed last month, whereas manufacturing might be somewhat weaker. The US monthly jobs report is likely to be in focus today, eclipsing separate reports on international trade and durable goods orders.

In the UK, just released data showed that the nation’s construction PMI recorded a significant rise in August. On the other side of the English Channel, market participants look forward to the Eurozone’s producer price index (PPI) data for July, scheduled to release in a few hours.

Pound Sterling – UK Markets

The Pound has reversed its previous session gains against the US Dollar and is attempting to hold on to the crucial 1.32 handle. The just out data showed that UK’s construction PMI rose above expectations in August. Looking ahead, next week looks pretty busy in Britain, with a slew of economic data points lined up for release. This includes the nation’s services PMI, industrial production, consumer inflation expectations index, housing price data and the NIESR GDP estimate for the 3 months ended August.

Yesterday was an eventful day in Britain. The nation’s manufacturing PMI blew past expectations and rebounded to a 10-month high level in August. This news catapulted the Sterling to 1 and 3-week high levels against the greenback and the Euro respectively. This also came as a blow to naysayers who had stated that the British economy will be undermined by the Brexit vote. The nation’s manufacturing sector was resuscitated by a depreciation in the Pound post the Brexit shock which in turn led to an upswing in exports.

US Dollar – US Markets

The US dollar is trading higher against the common currency and the Pound this morning ahead of the crucial US monthly nonfarm payrolls report scheduled later today, as it could give clues on whether the US Federal Reserve (Fed) will increase the interest rate as soon as this month. Lately, top Fed officials have been repeatedly saying that their decision is purely dependent on incoming economic data, and a strong nonfarm payroll figure will increase enthusiasm surrounding the September interest rate rise.

Yesterday, data showed that the US ISM manufacturing index declined in August, entering into contraction territory. This was the first contraction since February 2016 and the lowest reading since January, thus fuelling fresh doubts surrounding the nation’s manufacturing outlook. Additionally, the Markit manufacturing PMI ticked lower in August, mainly due to softer rates of new order growth. Other economic data showed that US initial jobless claims slightly rose last week and construction spending remained flat in July, as weakness in spending on government projects offset gains in home building.

Euro – European Markets

The shared currency is trading lower against the greenback and the Pound this morning. Data released earlier in the session showed that the number of unemployed workers in Spain rose less than expected in August. Separately, a second GDP reading confirmed that the Italian economy stagnated during the second quarter of this year. Moving ahead, this week draws to a close with the Eurozone’s producer prices data and is projected to register a small increase for July. Next week, a plethora of crucial economic data points will be revealed in the Eurozone, such as the region’s investor confidence, retail sales and second quarter GDP data. However, apart from all this, the spotlight will be on the European Central Bank’s interest rate decision, set to be announced later next week.

Yesterday, the Euro ended mixed against its major peers. The final manufacturing PMI data for August across the Eurozone was released in the previous session. While the overall Eurozone PMI registered a fall, that of Germany remained steady in comparison to its preliminary reading.

Other Currencies – Highlights

The Canadian Dollar is trading lower against the US Dollar this morning. Earlier in the session, data showed that Canada’s RBC manufacturing PMI dropped to a 6-month low level in August, as new orders slowed, suggesting that the sector was failing to gain traction. Late in the session, Canada’s international merchandise trade deficit is scheduled for release. After widening for 2 consecutive months, it is expected to narrow in July. Additionally, Statistics Canada will come out with the nation’s labour productivity report for the second quarter. It contains a study about the average productivity of real GDP per hour worked and also indicates the health condition of overall labour force in Canada.

In other economic news, the Canadian economy shrank in the second quarter, its worst performance in 7 years, largely due to the wildfires in Alberta. Also, the nation’s current account deficit widened to a near-record level during the second quarter. Further, the nation’s industrial product price index surprisingly rose, while the raw material price index fell more than expected in July.