US: ING: Payrolls Keep Feds On For 50bp Hikes In Jun & Jul
Jun-03 19:11
- May saw the seventh month in the last eight where payrolls beat consensus (390k vs 318k), with solid gains throughout aside from a surprise 61k drop in retail. It’s especially encouraging given a slowdown in hiring had been hinted at in other reports.
- This report will likely please the Fed in that the job creation story is pretty good, but inflationary pressures in the labour market may well be starting to top-out. Wage growth was a touch softer than forecast at 0.3% M/M, suggesting the gains or 0.5 or 0.6% M/M through 2H21 are over.
- ING see slower payrolls growth ahead as have most of the 22mn jobs lost in Mar-Apr 2020 have been filled and corporates are likely more cautious with growing concern about the economic outlook.
- However, the tight jobs market with worker shortages and rising pay is both a constraint on growth and will keep inflation higher for longer.
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US STOCKS: Surging Higher, Yield Curves Surge Steeper
May-04 18:58
Fed Chairman Powell pours cold water on chances of 75bp hike in the near term to address surging inflation. Stocks like the measured comments so far, making new session highs: Latest equity levels:
- DJIA up 628.35 points (1.9%) at 33762.78
- S&P E-Mini Future up 78.75 points (1.89%) at 4248.25
- Nasdaq up 219.5 points (1.7%) at 12782.72
- Meanwhile short end rates rally to new session highs: yd curves gapping wider:
- 2Y10Y +9.429, 27.901 (L: 13.987 / H: 27.901)
- 2Y30Y +14.021, 36.253 (L: 17.232 / H: 36.253)
- 5Y30Y +11.215, 9.577 (L: -3.384 / H: 10.2)
WHITE HOUSE: WH Press Conference Beginning Shortly
May-04 18:45
White House Press Secretary Jen Psaki is due to deliver her daily press conference shortly.
- A livestream can be followed here: https://www.youtube.com/watch?v=3sbAyWSLTC8
US TSY FUTURES: Renewed Selling As Powell Presser Gets Underway
May-04 18:39
Tsys back to midmorning lows as Chairman Powell discusses inflation metrics:
- "We are highly attentive to the risk that high inflation poses to both sides of our mandate, and we are strongly committed to restoring price stability. Against the backdrop of the rapidly evolving economic environment, our policy has been adapting and it will continue to do so."
- "The surge in prices of crude oil and other commodities that resulted from Russia's invasion of Ukraine is creating additional upward pressure on inflation. COVID related look downs in China are likely to exacerbate supply chain disruptions further as well."
- 30YY tops 3.0524%
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