US stocks ended higher this week as investors weighed a better-than-expected June jobs report against worries about a sooner-than-expected end to Federal Reserve stimulus program.
Encouraging news from the US job market and forward guidance on the future of monetary policy from the ECB also helped offset worries about an intensifying political crisis in Egypt.
Following is an economic review for the week July 01 - July 05, 2013.
Monday, July 01
ISM Manufacturing PMI (June 2013):
ISM Manufacturing PMI registered 50.9%, an increase of 1.9% points from May's reading of 49%, indicating expansion in the manufacturing sector for the fifth time in the first six months of 2013.
Tuesday, July 02
US Factory Orders (June 2013):
US factory orders increased 2.1% in May, adding to tentative signs of stabilization in manufacturing after a recent slowdown.
Wednesday, July 03
US Trade Balance:
US trade deficit increased more than expected in May as imports surged. The trade gap widened to $45 billion, up from a revised $40.1 billion in April.
Canada Trade Balance:
From April to May, merchandise imports dropped 3.2% while exports fell 1.6%. The trade gap, subsequently, dropped, falling from $951 million to $303 million.
ISM Non-Manufacturing PMI:
ISM Non-Manufacturing PMI for June disappointed with a drop to 52.2 points. It was expected to edge up from 53.7 to 54.3 points.
Crude Oil Inventories:
US crude oil inventories fell by 10.3 million barrels in the week ended June 28, compared to expectations for a decline of 2.3 million barrels. Oil prices ended higher as traders fretted about unrest in Egypt and reacted to rapidly tightening supplies in the US domestic market.
Thursday, July 04
BOE Rate Decision & Asset Purchase Plan:
European shares rallied to post their biggest one-day jump in 10 weeks on Thursday, after the Bank of England and the European Central Bank both gave guidance for the first time on the path for future monetary policy. Bank of England kept benchmark rates unchanged at a record low of 0.5%, but indicated that monetary policy would continue to be accommodative. ECB President Mario Draghi also provided forward guidance on the future of monetary policy. Draghi explicitly pledged to keep key interest rates at current levels or lower for "an extended period of time."
Friday, July 05
US Non-Farm Employment Change:
Non-Farm Payrolls rose faster than expected in June (195K vs. 165K). Unemployment rate unexpectedly remained constant in June at 7.6% despite an expected drop to 7.5%. Stocks gained as bonds and precious metals sold off on the news as markets began to price in more or sooner tapering of asset purchases from the Federal Reserve.
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