TradeTheNews.com US Market Update: Non-Farm Payrolls Fail To Bring Home Bacon
Friday, June 01, 2012
TradeTheNews.com US Market Update: Non-Farm Payrolls Fail To Bring Home Bacon
DJIA -228 S&P500 -25 NASDAQ -59
***Economic Data*** - (CZ) Czech May Budget Balance (CZK): -79.1B v -44.7B prior - (RO) Romania Mat Total International Reserves: $37.7B v $38.5B prior - (PE) Peru May Consumer Price Index M/M: 0.0% v 0.1%e; Y/Y: 4.1% v 4.2%e; Wholesale Prices M/M: -0.3% v +0.1% - (IN) India Forex Reserves w/e May25th: $288.3B v $290.0B - (BR) Brazil Q1 GDP Q/Q: 0.5%e; Y/Y: 0.8% v 1.3%e; GDP four Quarters Accumulated: 1.9% v 2.7% prior - (US) May Change in Nonfarm Payrolls: 69K v 150Ke; Change in Private Payrolls: 82K v 164Ke; Change in Manufacturing Payrolls: 12K v 15Ke - (US) May Unemployment Rate: 8.2% v 8.1%e; Underemployment Rate: 14.8% v 14.5% prior; Change in Household Employment: +422K v -169K prior - (US) May Avg Hourly Earning M/M: 0.1% v 0.2%e; Y/Y: 1.7% v 1.8%er; Avg Weekly Hours: 34.4 v 34.5e - (US) Apr Personal Income: 0.2% v 0.3%e; Personal Spending: 0.3% v 0.3%e - (US) Apr PCE Deflator M/M: 0.0% v 0.1%e; Y/Y: 1.8% v 1.9%e - (US) May PCE Core M/M: 0.1% v 0.1%e; Y/Y: 1.9% v 1.9%e - (CA) Canada Mar Gross Domestic Product M/M: 0.1% v 0.3%e; Y/Y: 1.6% v 1.9%e; Quarterly GDP Annualized: 1.9% v 1.9%e - (US) May Final Markit US PMI: 54.0 v 53.9 prelim - (BR) Brazil May PMI Manufacturing: 49.3 v 49.3 prior - (US) May ISM Manufacturing: 53.5 v 53.8e; Prices Paid: 47.5 v 57.0e - (US) Apr Construction Spending M/M: 0.3% v 0.4%e - (MX) Mexico Apr Remittances: $2.0B v $1.9Be
- Equity indices are getting crushed on both sides of the Atlantic this morning following the May US employment reports. The DJIA turned negative for the year just after the open and is down more than 200 points in mid-morning trading, while the S&P500 is firmly below 1300. In Europe, the slide has been even more dramatic than in the US, with Germany's DAX down as much as 4% in the wake of the data, before ticking up a bit. In a sign of the stress, the VIX index opened above 25 after briefly testing above this level in early trading during yesterday's session. There is no salvaging the May employment data: employers added just 69,000 jobs, the fewest in a year and less than half the expected figure, and the unemployment rate ticked up to 8.2%. Overnight the May manufacturing PMI data in Europe was very, very weak, however this morning's US May ISM Manufacturing survey dipped only slightly from April, only a bit below expectations. The stunning equity declines are even further suppressing yields, with yields on German 10-year bonds trading as low as 1.13% before bouncing back a bit, while yield on the US 10-year UST is near historical lows of 1.47%. There were some highly volatile moves in FX markets post-data as rumors of intervention and/or imminent coordinated G8 action made the rounds, including talk of a "special dollar window." CNBC reported that their sources believe European officials were discussing negative interest rates as a potential tool for stimulus. Front-month WTI crude dipped from $86.50 earlier this morning to around $83.50. Spot gold has rocketed up 3%, to around $1,610 as the dollar
- US May auto sales out this morning have been pretty good. Sales at Chrysler improved to their highest level since 2007, marking the 26th-consecutive month of sales gains for the firm. Ford and General Motors saw 12.6% and 11% gains, respectively, although totals at both firms slightly missed consensus expectations. Ford said it was increasing its production levels in Q3 to meet strong demand. Shares of both F and GM are down about 3.5% a piece in the early going. Another high-profile victim this morning is Facebook, which saw its second-ever day of positive gains in trading yesterday. This morning, FB is down around 6%.
- In FX trading, EUR/USD tested fresh two-year lows at 1.2289 but did find the ability to bounce over 150 pips from its lows in a short-covering rally to test 1.2450. However the euro gave up some gains and fell back to 1.2360 mid morning. The momentary dollar weakness was reflected in precious metals, driving spot gold's big gain. The yen firmed against the greenback in the aftermath of the payroll data to three-month highs, to levels not since the BOJ implemented its 1% inflation target back in February. The move below the 78 handle prompted speculation that the Ministry of Finance might authorize the BoJ to again embark on FX intervention (last officially performed on Oct 31st 2011). Dealers did confirm that BoJ checks spooked the market.
***Looking Ahead*** - 12:00 (IC) Iceland Q1 Current Account (ISK): No est v -49B prior - 12:00 (IT) Italy May New Car Registrations Y/Y: No est v -18.0% prior - 13:00 (IT) Italy May Budget Balance: No est v -€2.3B prior; Budget Balance YTD: No est v -€30.5B prior - 14:00 (BR) Brazil May Trade Balance: $4.1Be v $881M prior; Exports : $24.0Be v $19.6B prior; Imports: $19.8Be v $18.7B prior - 17:00 (US) May Total Vehicle Sales: 14.50Me v 14.38M prior; Domestic Vehicle Sales: 11.20Me v 11.12M prior
***Weekend*** Sat 21:00 (CN) China May Non-manufacturing PMI: No est v 56.1 prior
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