Brexit and the U.S. Economic Outlook

The outlook for the US economy and the upside on the stock markets after new US numbers
The US jobs figures for June are the strongest since October 2015. Both the US dollar and European stock markets strengthened after the announcement. However, SEB’s Chief Economist Robert Bergqvist doubts that job statistics are enough to get the market to exhale.
“We do not know if companies are now after Brexit begin cutting back on new hiring.”

The US market went up as the dollar strengthened after the US jobs report, reports the news agency Direkt, while the mood on the European stock markets rose, reports Bloomberg.
The statistics showed that the number of employed persons in the US increased by 287 000 in June, compared to the 180,000 that were expected. It is the largest employment gain since October 2015.

However, SEB’s Chief Economist Robert Bergqvist does not believe that the strong job numbers sufficient for that optimism to be entrenched at the dealers. But it is a welcome piece of the puzzle that gives us some peace of mind. Brexit results have not had time to be reflected in job statistics.Robert Bergqvist indicate that the outcome of the Brexit vote not yet had time to be reflected in the statistics – and that there is still great uncertainty about the consequences.

– It’s a figure that is backward-looking. We get clear signals from the United Kingdom to households and businesses react fairly strongly due to the Brexit fall out, says Robert Bergqvist – and emphasizes:
– We do not know if companies are now after Brexit begin cutting back on new hiring.
Robert Bergqvist will closely monitor the reporting on the upcoming interim reports.
– They will be very crucial as the temperature of what the economy is going and how companies are doing, he says.

Robert Bergqvist does not believe that job numbers will alter the Fed’s assessment in July.
– I believe that the US central bank is afraid of two things: First, if brexit can get exchanges breathless again. Partly too strong dollar. The strengthening of the dollar can hit on the American economy. Robert Bergqvist indicate that while the British pound fell trying to Japan and China to weaken their currencies.  I can see the contours of a currency war going on. All currencies cannot be weakened without any amplified – and then it is the US dollar, he said.
If the dollar strengthens too much, it can dampen the outlook for the US economy. There is a risk for the US central bank. We believe that it is only towards the end of the year as the Fed raises interest rates, says Robert Bergqvist.

– Len Moses