Technical Analysis

The strongest to weakest of the major currencies

The USD is the strongest and the  NZD  is the weakest as the NA session begins. The ranked order of the currencies today is the opposite of the closing ranking at the end of day yesterday. At the close, both the  AUD  and the NZD were vying for the strongest and the USD was the weakest (see post here). There is a little more risk off sentiment in the markets today. What we can also say is that the different currencies are more scrunched together as traders await the US jobs data at 8:30 AM ET. PS. London is closed for the Jubilee celebration/May bank holiday.

The BLS is expected to announce an additional 325K gain for the Non Farm payroll at 8:30 AM ET. That comes after a 428K advance in April. The ADP report released yesterday showed 128K which was weaker than the 300K estimate. Care should be taken as the correlation between the two has not been all that great.

In the ISM manufacturing survey this month, the employment component did show a dip below the 50 level (employment came in at 49.6 vs 50.9 in April).

The US unemployment rate is expected to dip to 3.5% from 3.6%. The Average earnings are expected at 0.4% vs 0.3% (YoY 5.2% ve 5.5% last month). Manufacturing is expected to rise by 40K vs 55K last month (despite the dip to negative in the ISM manufacturing survey to below 50).

Stocks are lower. Elon Musk tweeted he had a “super bad feeling about the economy” and would slow/look to cut 10% of Tesla jobs. Apple shares are falling as well in early trading.

Yields in the US are marginally higher.

Feds Brainard speaks again after refusing to say a September pause might be needed yesterday. ISM services PMI will be released at 10 AM ET.

A snapshot of the markets ahead of the jobs data are showing:

  • Spot gold is trading down $3.50 -0.20% $1865.09
  • Spot silver is up $0.14 or 0.63% $22.42
  • WTI crude oil is trading down $0.63 at $116.26
  • Bitcoin is trading lower at $29,735

In the premarket for US stocks, the futures markets are implying a lower opening. Yesterday, the sharp gains higher erased the losses for the week, but today will be the deciding day in the holiday shortened week

  • Dow is trading down -153 points after yesterdays 435.05 point gain
  • S&P index is down -29 points after yesterdays +75.57 point gain
  • NASDAQ index is down -143 points after yesterdays +322.44 point gain

In Europe: the major indices are mixed. Italy is back from holiday in catching up after yesterdays gains. UK is still close

  • German DAX up 5.53 points or 0.04% at 14492.39
  • France’s CAC 4.2 points or 0.06% 6504.65
  • Spain’s Ibex is down -14 points or -0.16% 8729.89

The US debt market this morning, yields are moving modestly higher. Yesterday the changes were modest as well as the market wakes for the US jobs report.

US yields

US yields ahead of the US nonfarm payroll

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