Main USA equity markets close at record highs, U.S. Dollar strengthens, gold falls, oil slips; despite a glut reduction
Despite little USA economic calendar news on Thursday actually supporting the strong rally in U.S. equities, the SPX closed up 0.76% and the DJIA up 0.65%, both closing at record highs, with bank stocks leading the rally. The one release that beat forecast significantly, was the ADP private jobs report, indicating that 253k jobs were created in May, beating expectations of 180k, fuelling excitement that Friday’s NFP data may surpass the predictions of 180k. However, despite historically behaving as a prescient predictor of the NFP numbers, ADP hasn’t always been a reliable barometer, or indicator. Weekly unemployment claims in the USA in fact missed the forecast; coming in at 248k, construction spending slumped into negative territory at -1.4% in April, and the ISM manufacturing index came in ahead of the prediction; at 54.9 it just beat last month’s data print, by 0.1.
The U.S. Dollar enjoyed modest gains versus its major peers; USD/JPY ended the day up circa 0.6%, at approx. 111.37, GBP/USD closed the day out at circa 1.2879, down 0.2%, EUR/USD down 0.4% at 1.1210. WTI oil fell, despite the glut in domestic USA supply falling dramatically, the price of a barrel fell to $47.79, down circa 0.7%. Gold fell to $1265 per ounce, down approx. 0.3%, giving back some of the 0.5% gains obtained on Wednesday.
From Europe we learned that Swiss YoY GDP fell to 1.1% in the first quarter. From the UK Nationwide reported that the UK’s house prices fell by 0.2% in May. France’s manufacturing PMI fell slightly, from 54 to 53.8, Italy’s fell to 55.1 from 56.1, Germany’s manufacturing PMI improved to 59.5, whilst the UK’s improved to 56.7, from 56.5. European equities enjoyed a positive day; Euro STOXX 50 closed up 0.35%, CAC up 0.66%, DAX up 0.40% and the UK’s FTSE closed up 0.32%.
Economic calendar events for June 2nd, all times quoted are London (GMT) time.
08:30, currency impacted GBP. Markit/CIPS UK Construction PMI (MAY). UK construction is predicted to fall to 52.6, from 53.1.
12:30, currency impacted USD. Change in Non-farm Payrolls (MAY). The forecast is for 180k jobs to have been created in May, significantly less than the 211k posted in April.
12:30, currency impacted USD. Trade Balance (APR). The trade balance deficit is predicted to rise to -$45.5b, from -$43.7b in March.
12:30, currency impacted USD. Unemployment Rate (MAY). The USA’s unemployment rate is predicted to remain unchanged, at 4.4%.
12:30, currency impacted USD Average Hourly Earnings (YoY) (MAY). Average earnings are predicted to have grown by 2.6%, from 2.5%.
12:30, currency impacted USD. Labour Force Participation Rate (MAY). The labour force involvement rate in the USA is predicted to stay relatively unchanged, at 62.9%.
17:00, currency impacted USD. Baker Hughes U.S. Rig Count (2 JUN). Last week’s rig count was 908, this reading will be carefully monitored for any change, given the current gyrations in the price of WTI oil.