The JPY is the strongest and the AUD is the weakest as the North American session begins. The USD is mixed ahead of the US (and Canada) jobs report(s). The US stocks are not looking good ahead of the report after Broadcom earnings failed to impress after the close yesterday. It's shares are down -7.6%. Nvidia is down -1.36%, Micron is down -1.53%, AMD is down -1.06%. The Nasdaq is down -200 points or 1.1% in premarket trading. US yields are lower by a couple to 3 more basis points.
At 8:30 AM the US jobs report from the BLS will be released. What is expected and what do we know about the most recent employment indicators?
- Consensus estimate +160K versus +175K prior (range +100K to +246K)
- July was +114K
- Private consensus +139K versus +148K prior
- Unemployment rate consensus estimate 4.2% versus 4.3% prior
- Prior participation rate 62.6%
- Prior underemployment U6 7.8% v
- Avg hourly earnings y/y exp +3.7% versus +3.7% prior
- Avg hourly earnings m/m exp +0.3% versus +0.3% prior
- Avg weekly hours exp 34.3 versus 34.2 prior
Numbers released so far this month:
- ADP report +99K versus +122K prior -- this was a three-and-a-half year low
- ISM services employment 50.2 vs 51.1 prior (weak but first back-to-back reading above 50 since late-2023)
- ISM manufacturing employment 46.0 versus 43.4 prior. non manufacturing employment 50.2 vs 51. 1
- Challenger job cuts 75,891 versus 25,885K prior -- highest since 2009 (excluding 2020 pandemic)
- Philly employment -5.7 versus +15.2 prior
- Empire employment -6.7 versus -7.9 prior
- Initial jobless claims survey week 233K versus 245K prior
The Canada jobs report is expecting an unemployment change of the 25K vs -2.8K last month. The unemployment rate is expected 6.5% versus 6.4% last month. Last month the full-time employment rose by an oversized 61.6K. The part-time employment fell by nearly equal -64.4K.
Focus will be on the US jobs report especially as the Fed moves toward its first interest-rate cut on September 18. Will the cut be 50 or 25 basis points. The Fed Chair said that the Fed does not want to see further weakness in the employment situation. Inflation seems to be under control.
Later, New York Fed Pres. Williams will be speaking at 8:45 AM. Also, Feds Waller will speak at a 11 AM before the Blackout period ahead of the rate decision on September 18 begins after the close today.
A snapshot of the other markets as the North American session begins shows:
- Crude oil is trading up $0.37 or 0.55% at $69.54. At this time yesterday, the price was at $69.44
- Gold is trading up unchanged at $2516. At this time yesterday, the price was at $2516.02.
- Silver is trading unchanged at $28.77. At this time yesterday, the price is at $28.64
- Bitcoin is trading lower at $55,993. At this time yesterday, the price was at $56,685
- Ethereum is trading lower at $2372.70. At this time yesterday, the price was at $2389.30
In the premarket, the snapshot of the major indices are mixed after a mixed day yesterday
- Dow Industrial Average futures are implying a loss of -136 points. Yesterday the index help -219.22 points or -0.54% at 40,755.76
- S&P futures are implying a decline of -30.66. Yesterday the index fell -16.66 points or -0.30% at 5503.42.
- Nasdaq futures are implying a decline of -186 points points. Yesterday the index rose 43.37 points or 0.25% at 17127.66
Yesterday, the small-cap Russell 2000 fell -13.16 points or -0.61% at 213-2105
European stock indices are trading lower after mixed results yesterday:
- German DAX, -0.45%
- France CAC, -0.12%
- UK FTSE 100, -0.19%
- Spain's Ibex, -0.29%
- Italy's FTSE MIB, -0.24% (delayed 10 minutes).
Shares in the Asian Pacific markets closed lower:
- Japan's Nikkei 225, -0.73%
- China's Shanghai Composite Index, -0.81%
- Hong Kong's Hang Seng index, -0.07%
- Australia S&P/ASX index, +0.39%
Looking at the US debt market, yields are little changed:
- 2-year yield 3.726% -2.5 basis points. At the same yesterday, the yield was at 3.762%
- 5-year yield 3.516% -2.4 basis points.. At this time yesterday, the yield was at 3.557%
- 10-year yield 3.700%, -3.3 basis points. At this time in yesterday, the yield is at 3.761%
- 30-year yield 3.984% -3.8 basis points. At this time yesterday, the yield is at 4.068%
Looking at the treasury yield curve,
- The 2-10 year spread is back into negative territory at -3.0 basis points. At this time yesterday, the yield spread was +0.05 basis points.
- The 2-30 year spread is at 25.7 basis points. At this time yesterday, the yield spread was +30.8 basis points.
In the European debt market, the 10 year yields are mixed:
