As traders in the US return from the Independence Day holiday reluctantly, they will need to face the US and Canada jobs reports (locked and loaded).
The expectations are for US non-farm payroll to come in at 191K vs 272K, the employment rate to stay at 4.0% (unchanged from last week), and average hourly earnings of 0.3% vs 0.4%. In Canada the employment change is expected at 27.3K vs 26.7K last month. The Unemployment rate is expected to rise to 6.3% from 6.2%. Locked and loaded.
In the UK yesterday, voters went to the poll and punished the Conservatives. Labours Keir Starmer will be the next Prime Minister of the UK as the Labour Party won a decisive majority, securing 410 of the 650 seats in parliament. The thumping marks a significant defeat for the Conservative Party, led by Rishi Sunak, which is set to win only 131 seats, the worst electoral performance in its history. The election ended 14 years of Conservative-led government and saw notable Conservative figures, including former Prime Minister Liz Truss, pro-Brexit lawmaker Jacob Rees-Mogg, and former leadership contender Penny Mordaunt, lose their seats. Sunak and his finance minister Jeremy Hunt retained their seats.
As far as central bank policy, the BOE is odds-on favorite to cut rates at the August meeting (60%). We will see how comments from BOE officials come out over the next week or so.
The UK shifts from conservative to liberal. Today, the political life of Pres. Biden is on the line as he conducts an interview with ABC News George Stephanopolis after his disastrous performance at last week's debate. The US is trending from more liberal to conservative as voters lean toward change.
From the Fed today, New York Fed President John Williams stated that the Federal Reserve still has a way to go to reach its 2% inflation target and emphasized ongoing commitment amidst uncertainty in the monetary policy landscape.
A snapshot of the other markets as the North American session begins shows:
- Crude oil is trading up five cents at $83.92. At this time Wednesday, the price was at $80.85
- Gold is trading up $9.90 or 0.42% at $2366.30. At this time Wednesday, the price was trading at $2345.66
- Silver is trading trade up $0.25 or 0.87% at $30.64. At this time on Wednesday, the price is trading at $30.20
- Bitcoin continued to move lower and trades at $55,325. At this time yesterday, the price was trading up at $57,672
- Ethereum is also trading at $2940.30. At this time yesterday, the price was trading at $3130
In the premarket, the snapshot of the major indices are trading little changed in premarket trading after gains yesterday at the S&P and NASDAQ index to new record high closes
- Dow Industrial Average futures are implying a decline of -33.10 points. On Wednesday, the Dow Industrial Average fell -23.85 points or -0.06% at 39308.01
- S&P futures are implying a gain 1.0 points. On Wednesday, the S&P index rose 27.99 points or 0.51% at 5537.01. That was a new record high close..
- Nasdaq futures are implying a gain of 9.62 points. On Wednesday, the index rose 159.54 points or 0.88% at 18188.30. That was a new record close as well.
European stock indices are trading higher:
- German DAX, +0.79%
- France CAC was 0.29%
- UK FTSE 100, +0.02% after the election and political shift
- Spain's Ibex, -0.40%
- Italy's FTSE MIB, +0.31% (delayed 10 minutes)..
Shares in the Asian Pacific markets were mixed
- Japan's Nikkei 225, unchanged
- China's Shanghai Composite Index, -0.26%
- Hong Kong's Hang Seng index, -1.27%
- Australia S&P/ASX index, -0.12%
Looking at the US debt market, yields are mixed with the shorter end higher and the longer end lower.
- 2-year yield 4.685%, -0.6 basis points. At this time Wednesday, the yield was at 4.772%
- 5-year yield 4.297%, -1.3 basis points.. At this time Wednesday, the yield was at 4.412%
- 10-year yield 4.335%, -1.2 basis points. At this time Wednesday, the yield was at 4.437%
- 30-year yield 4.509%, -1.1 basis points. At this time Wednesday, the yield was at 4.595%
Looking at the treasury yield curve the spreads became more negative after recent gains toward parity
- The 2-10 year spread is at -35.0 basis points. At this time Wednesday, the spread was at -33.7 basis points.
- The 2-30 year spread is at -17.7 basis points. At this time Wednesday, the spread was at -17.9 basis points.
In the US debt market, yields are lower in the benchmark 10 year note sector:
