Morning Minutes

Easing Wage Inflation Boosts Indices




US index futures have been climbing following the release of today’s North American employment reports with gains of 0.6% to 0.7%. The reports turned out to be significantly better than expected. Most importantly, both US average hourly earnings (4.6% vs street 5.0%) and Canadian average hourly wages (5.2% vs previous 5.4%) eased back a bit, taking some of the pressure off of central banks to remain hawkish. Job growth in Canada (104K vs street 8K) was particularly strong and US nonfarm payrolls also exceeded expectations (223K vs street 200K), indicating that the North American job market remains robust.

Signs of easing inflation pressures in Europe have supported indices across the pond with the Dax flat and the FTSE up 0.4%. Traders in currency and commodity markets have taken the employment and wage numbers in stride this morning for the most part, with the most notable move being a 3.0% drop in Natural Gas which appears to be related to continuing unseasonably warm weather reducing home heating demand in what has historically been peak season.

Economic news continues to roll out this morning with US factory orders (street -0.9%) and US ISM Services PMI (street 55.0) both due at 10:00 am.                            

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Colin Cieszynski, Chief Market Strategist

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

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