Global macro overview for 11/08/2017

Global macro overview for 11/08/2017:

The recent data confirm the US job market is still doing good. The US Initial Jobless Claims increased to 244k in the week ending August 5th from a revised 241k the previous week. The data was slightly above consensus forecasts of 240k, although there has been little overall change over the past few weeks. The four-week moving average in claims declined from 242k to 241k. On the other hand, the Continuing Claims (unemployed workers that qualify for benefits under unemployment insurance) in the week ending July 29th declined significantly to 1951k from a revised 1968k in the previous week. The reading has remained below 2000k for 15 successive weeks.

Last week NFP data were all better than anticipated: the headline NFP number was released at the level of 209k while market participants expected 183k jobs, the unemployment rate decreased to 4.3% from 4.4% and the average wages rose by 0.3%. The strong payrolls growth, persistently low initial jobless claims, falling unemployment, and firmer wages growth are good news and with the PPI and CPI scheduled for release today, we could see growing support within the Fed officials for additional rate hikes. Any US CPI data above 0.2% on monthly basis would increase the chances of Fed interest rate hike and could trigger more bullish approach towards the US Dollar across the board.

Let's now take a look at the US Dollar Index technical picture at the H4 timeframe. So far the bulls weren't strong enough to break out above the important technical resistance zone at the level of 94.11 - 94.47, but this might change is the data will beat the expectations. Please notice the price respected the short-term navy trend line support around the level of 93.35, which supports the near-term bullish bias.

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