Jobs Data Cools Rate Concerns

The Morning Minutes will not be issued on Friday due to the US holiday and will return on Monday, July 6th.

With Canada returning from a national holiday and the US preparing for a long weekend, employment data has moved back into focus. US nonfarm payrolls came in at 57K, below the Street estimate of 110K and down from the previous 129K, confirming Wednesday’s softer ADP private payrolls report of 98K v. Street expectations of 112K. The weaker labour data has helped ease concerns around potential US interest rate hikes, particularly after yesterday’s comments from Fed Chair Warsh suggested inflation remains too hot. Treasury yields and the US Dollar are moving lower this morning, while index futures are rallying.

Commodity prices are also helping to calm inflation concerns, with Crude Oil down 1.8% and trading below $67.50/bbl, while Gasoline is down 1.8% and trading below $2.90/gallon. Gold is up 1.0%, Copper is up 0.1%, and silver is up 2.1%.

Wednesday’s momentum swing in technology also appears to be reversing course. After rallying 8.8% yesterday following news that it plans to sell excess computing power, Meta Platforms is down 1.1% this morning. Meanwhile, Advanced Materials, which fell 10.0% yesterday, is up 4.3% in premarket action today. Shares of Advanced Materials are held in some portfolios managed by SIA Wealth Management.

NASDAQ futures are up 0.6%, while Dow futures are up 0.5%. In Asia, the Nikkei fell 2.4% while the Hang Seng gained 0.8%. In Europe, the DAX is up 1.2% and the FTSE is up 0.7%.

In rates and currencies, the US 10-year Treasury note yield has slipped back under 4.50%, while the US 30-year Treasury note yield has moved back under 5.00%. The US Dollar Index is down 0.8%, with the Euro up 0.7% and the Loonie up 0.4%.

Looking ahead, service PMI reports from regions outside the US are due Friday. US markets will be closed Friday in lieu of Saturday’s Independence Day holiday.

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