Looking for the silver lining…
27.07.2016 | Categories: News & EventsInvestor optimism returned towards the end of the week, buoyed by the expectation that the major central banks will remain supportive of financial markets and stronger than expected US economic data. The minutes from the last US Fed meeting showed that officials were losing confidence in the need to tighten monetary policy any time soon and that the May slowdown in US employment and Brexit referendum uncertainty influenced their decision to keep rates on hold. Renewed concerns over Italian banks resurfaced this week, adding to the fallout from the Brexit decision, but attention was soon shifted to the US to assess if sustainable economic recovery remained intact.
US data did not disappoint – both manufacturing and services data improved from the previous month; the much anticipated US payroll data showed that the economy added 287,000 jobs in June which was well above market expectations; the unemployment rate increased from 4.7% to 4.9%, but only because more people joined the labour force; and wages improved modestly and all together, the employment data eased fears over slowing momentum.