The trade deficit rose unexpectedly for the month of May as the imports increased to the 2nd highest mark in history, resulting in increasing the gap to 12.1% that is nearly around $45 billion. The main items to be imported by the economy include mobile phones, automobiles, and of course the fuel that is generated in other areas. In other words, the rise in fuel consumption by the U.S economy hints towards the improvement in its businesses and consumer sector that no longer seems stagnant.
Credit Suisse raises Red Signal for Aussie
According to Credit Suisse, the Australian dollar would continue its bearish move in the upcoming weeks and months, where it is expected that it may reach the level of 75 U.S cents level that has not been seen since the second quarter of 2009.
Moreover, the governor of Reserve Bank of Australia also pointed out yesterday that the exchange rate may be kept further low if any need arises, while we should remember that the interest rate is already at the record low level of 2.75%.
Australia’s first Recession – When?
The Australian Prime Minister Kevin Rudd raised the concerns regarding the first ever recession of the country in more than 20 years, and emphasized to make the most of the low interest rate levels by investing more in the economy, exporting more to other countries, while creating more opportunities for business expansion and employment.
Bond Funds Decline Drastically – Is the FED responsible?
Ever since the FED chairman Ben Bernanke hinted towards ending the extravagant bond buying plan in the future, investors have become wary over the same and have started pulling out funds from the bond market as they no more see bulls ruling over this market.
Unemployment in the United States
Although the lay-offs increased in the first half of June this year, but the number of jobs added in the second half were pretty sharp as the private companies increased their payrolls and the unemployment claims also fell by 5000 last week. Moreover, ADP indicated that the U.S companies added around 188,000 workers in the month of June, which is also an indication that the labor market is improving.
The most important data release of Non-farm payrolls and the overall monthly unemployment numbers are due this Friday where analysts are expecting that the numbers would be in favor of the U.S economy as the manufacturing, industrial, and construction sector also experienced a positive trend.