Markets were mixed on Wednesday with the US$ ending slightly weaker (DXY; -0.25%) and with stocks pretty much flat, although as usual the Nasdaq outperformed in rising by 0.95%. The S&P also rose, by 0.5%, although the DJI slipped back by 0.3% in the first session of Q2, after data indicated that the labor market continues to improve. The ADP private sector created 2.4 million jobs in June although below expectations of +3 million, with 70% of new jobs being seen in the leisure, hospitality, trade and construction industries, and comes ahead of today’s official US jobs report. The ADP also sharply upgraded the May figure from -2760k loss to 3065k growth, essentially catching up with last month’s strong NFP figure, and doing nothing to hurt sentiment.
The US$ was mixed, reversing early strength after the Euro fell quite sharply on the release of the soft EU PMIs, but overall most major pairs remain within their previous range although the US$ is beginning to look increasingly heavy.
The precious metals gave up around 0.5%/1%, while oil chopped around without doing very much at all.
Further encouraging US economic news came in the form of the manufacturing PMIs, with the news that ISM’s June manufacturing index rose to 52.6 from 43.1 in May, better than expectations of 49.5, and thus back into expansionary territory.
Earlier in the day, the Eurozone Manufacturing PMI was finalised at 47.4 in June, up from May’s 39.4 and better than the expected 46.9 but remains in contraction, below 50, for 17 successive months.
The FOMC Minutes were released, indicating that the Fed are looking at reviving a Great Recession-era promise to keep interest rates low until certain conditions are met, in a bid to deliver a more rapid recovery from the recession triggered by the coronavirus pandemic. Various board members were recorded as favouring a promise to leave rates low until inflation meets or the Fed’s 2% goal, which remains a long way off at this stage.
Thursday is likely to be pretty quiet until the US session, with just the May Australian Trade Balance (exp +9bio, Previous +8.8bio) and the EU PPI (exp -4.8%yy) to provide any interest. Things will warm up once the US get going as the US jobs data will be released a day early, ahead of the US holiday. The figures are expected to be: Headline rate (12.3%)/NFP (+3mio), Average Hourly Earnings (-0.7%mm, +5.3%yy), Average Weekly Hours (34.5). Aside from the jobs data we also get the May Factory Orders (exp +8.7%mm) and the ISM NY Business Conditions. Have a good day.
Economic data highlights will include:
Thur: Australian Trade Balance, EU PPI, Unemployment, US Unemployment, NFP, NY Business Confidence, Factory Orders,
Market moves, in brief:
FX: DXY 97.13 (-0.25%)
Bonds: US10Y; 0.678% (+2.93%), German 10Y; -0.392% (13.82%), UK 10Y; 0.208% (+22.62%), Australian 10Y; 0.946% (+7.58%), NZ 10Y; 0.988% (+5.23 %), China 10Y; 2.881% (-0.39%)
Stock Indices: DJI; -0.30%, S+P; +0.50%, NASDAQ; +0.95%, EUStoxx50; -0.17%, FTSE100; -0.19%, Shanghai Composite; +1.38%, ASX200SPI: +0.84%
|INDICES / COMMODITIES|
There is not much on the map that stands out to me right now although GbpAud looks a bit better bid.
Elsewhere everything is very choppy and without any real direction. A neutral stance is generally required ahead of the NFP figures later today.
The US$ may be on the point of turning lower but I think more confirmation is yet required and conditions may just remain very choppy.
Gold and Silver looking heavy in the short term but maybe a buy on dips. The bearish divergence on the daily charts warn against jumping in too early.
|1 Hour||Neutral – Turning Higher?||Turning Lower?||Up – Overbought||Turning Neutral||Neutral||Turning Neutral|
|4 Hour||Turning Neutral||Turning Lower||Turning Higher||Turning Neutral||Neutral – Turning Higher?||Neutral – Turning Higher?|
|1 Day||Turning Lower||Neutral – Turning Higher?||Turning Neutral||Neutral – Turning Higher?||Turning Lower||Turning Lower|
|1 Week||Neutral – Turning Higher?||Neutral||Turning Neutral||Neutral – Turning Lower?||Turning Higher||Turning Higher|
|1 Hour||Neutral – Turning Lower?||Turning Neutral||Turning Neutral||Down||Turning Lower?||Turning Neutral|
|4 Hour||Turning Lower?||Turning Higher?||Turning Higher||Turning Lower?||Turning Lower||Turning Neutral|
|1 Day||Neutral – Turning Higher?||Neutral – Turning Lower?||Neutral – Turning Lower?||Up – Bearish Divergence||Turning Neutral||Neutral – Turning Lower?|
|1 Week||Turning Lower?||Turning Higher||Up||Up – Overbought||Neutral – Turning Higher?||Up|
|1 Hour||Turning Neutral||Up||Turning Higher||Neutral||Neutral – Turning Higher?||Turning Neutral|
|4 Hour||Turning Neutral||Turning Lower||Neutral – Turning Higher?||Turning Neutral||Turning Neutral||Turning Neutral|
|1 Day||Turning Neutral||Turning Neutral||Neutral – Turning Higher?||Up||Turning Neutral||Turning Neutral|
|1 Week||Turning Neutral||Turning Higher||Turning Lower||Turning Higher?||Turning Lower||Neutral – Turning Higher?|
GbpAud – Daily
Gold – Daily