Morning Minutes

Crude Oil Keeps Climbing; Nonfarm Payrolls Exceed Expectations




WTI and Brent Crude oil are up 2.6% and 2.8% respectively this morning, with WTI trading above $65.00/bbl after OPEC+ decided to hold off on any production increases in the near term. There had been rumors that the group was considering restoring 1.5mmbbl/d of production. Meanwhile, reports are out today suggesting that Canadian oil sands are producers are set to take 0.5 mmbbl/d of production offline for the next few weeks for maintenance. Gasoline is up 2.0% while natural gas is flat today. In metals action, copper is up 2.0%.

US nonfarm payrolls came in a lot stronger than expected this morning (379K vs street 182K, and last month was revised upward to 166K from 49K). Canadian employment isn’t out until next Friday, but Statistics Canada did report that Canada posted a trade surplus of $1.4B which is significantly better than the $1.4B trade deficit the street was expecting.  

US index futures have started to pick up steam after the strong employment numbers, and are now up 0.5% to 0.8%. Futures have been trying to shrug off recent US market weakness which included losses of 1.1% for the Dow Industrials, 1.3% for the S&P 500 and 2.1% for the NASDAQ yesterday.

The US 10-year treasury yield rallied back up above 1.50% yesterday and has moved back above 1.60% on the positive job numbers. The positive payrolls numbers and rising treasury yields have put a tailwind behind the US Dollar today which is up 0.9% against gold, 1.9% against silver, 0.2% against the Canadian Dollar and 0.4% against the Euro.

In corporate news, Costco reported disappointing earnings ($2.14 vs street $2.45) despite at 15% increase in sales, which management blamed on rising wages. Clothing retailer Gap, on the other hand, is up 3.5% in premarket trading after reporting mixed results but suggesting that management expects results to improve this year as more economies reopen.   

SIA Wealth In The Media

Chief Market Strategist Colin Cieszynski recently appeared on BNN Bloomberg where he discussed the impact of rising treasury yields on markets and tactical rotation between equity market sectors.

Sectors that lagged in 2020 are now catching up: SIA Wealth Management’s Cieszynski

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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