Forexlive Americas FX news wrap 6 Jun: ECB cuts rates but it is a hawkish cut.
US stocks end the day with mixed results/little changedCrude oil futures settle at $75.55Some ECB hawks argued that committing to June rate hike too early was a mistakeWhat to expect from the US jobs report tomorrowNo cut seen in July at the ECBEuropean indices close higher on the day. Gains led by Italy/SpainUS treasury announces coupon auctions for next week. Auction sizes come in as expectedSources: ECB all but rules out a July cut. A September but is unclearAtlanta Fed GDPNow growth estimate for Q2 bounces to 2.6% from 1.8% previouslyNvidia turns down on day and so does NASDAQ indexCanada Ivey PMI index seasonally adjusted 52.0 versus 63.0 last monthECB Pres. Lagarde press summary and a look at the EURUSD price action.Kickstart the FX trading day for June 6 w/a technical look at the EURUSD, USDJPY & GBPUSDECB's Lagarde: Rate cut today is justified by confidence in the path aheadECB's Lagarde: We are not pre-committing to a particular rate pathUS international trade deficti for April $-74.6 billion versus -76.1 billion estimateUS initial jobless claims 229K vs 220K estimateUS Q1 revised non-farm productivity +0.2% vs +0.3% q/q prelimCanada April trade balance -$1.05 billion vs -$1.40 billion expectedECB cuts he is straight by 25 basis points in a month a policy meeting, as expectedThe full statement from the June 2024 ECB rate decisionThe CHF is the strongest and the NZD is the weakest as the NA session beginsForexLive European FX news wrap: Markets pensive awaiting ECB, US weekly jobless claimsUS May Challenger layoffs 63.82k vs 64.79k priorThe ECB pressed on with the 25 basis point cut today taking the main financing rate to 4.24% from 4.4%. It was the first cut rates since 2019. The cut was widely anticipated. However, ECB Pres. Lagarde was reluctant to talk about a future path for rates saying that we are not pre-committing to a particular rate path and that the rate cut today is justified by the confidence in the path to lower inflation ahead. However the ECB president also commented how the path may be a rocky one. Later, ECB sources comments expressed apprehension in the pre-commitment to a rate cut. There was also an understanding that a July cut was likely off the table and that September would be the first chance to reevaluate for another cut.So although ECB went through with "what they promised" or greatly implied, it was a hawkish cut. Looking at the strongest to the weakest of the major purchase today, the, EUR ended the day mixed with gains vs the USD, GBP and NZD and declines v the JPY, CHF and AUD. The EUR was nearly unchanged vs the CAD. The Bank of Canada also happened to cut interest rates this week (yesterday).For the day, the CHF is ending the day as the strongest of the major currency pairs. The USD is the weakest one day ahead of the US jobs report which will be released at 8:30 AM ET tomorrow. The FOMC will meet next week on Wednesday with expectations of no change in policy. Fed officials have already said that they need more information on the path for inflation before contemplating easing policy. They are in no hurry. The expectations for the jobs report tomorrow are:Non-farm payroll estimate 185K (vs 175K)Private payroll, 170K vs 167K last month.Manufacturing payrolls, 5K vs 8K last monthUnemployment rate 3.9% est vs 3.9% last monthAverage earnings MoM 0.3% versus 0.2% last monthAverage earnings YoY 3.9% versus 3.9% last monthAverage workweek (hrs) 34.3 versus 3.4% last monthlabor force participation rate:No estimate versus 62.7% last monthU6 underemployment: No estimate versus 7.4% last monthAhead of the report, initial jobless claims rose to 229K which was above the expectations of 220KCanada will also release its jobs report tomorrow with expectations for employment change coming in at 24.8K with the unemployment rate rising to 6.2% from 6.1% last month.Today, the US stock market traded up-and-down ahead of the key events ahead.Dow Industrial Average average rose 0.20%S&P index fell -0.02%NASDAQ index fell -0.09%Recall from yesterday, both the S&P and NASDAQ index closed at record levels.In Europe today, the major indices moved higher led by the Italy's FTSE MIB (+0.95%). Spain's Ibex rose by 0.80% and Germany's DAX rose 0.41%.In the US debt market, yields are in the day little changed. The 10 year yield has moved from 4.638% last Wednesday to 4.289% currently – a decline of -35 basis points. For today:2 year 4.730%, -0.1 basis points5 year 4.301%, -0.5 basis points10 year 4.289%, changed30-year 4.436%, -0.5 basis pointsThe price of crude oil moved higher today in trades at $75.63. With one day to go in the week, the price is below its 200 week moving average at $75.97. A close below that moving average level would be the first since January 2021. This article was written by Greg Michalowski at www.forexlive.com.
- US stocks end the day with mixed results/little changed
- Crude oil futures settle at $75.55
- Some ECB hawks argued that committing to June rate hike too early was a mistake
- What to expect from the US jobs report tomorrow
- No cut seen in July at the ECB
- European indices close higher on the day. Gains led by Italy/Spain
- US treasury announces coupon auctions for next week. Auction sizes come in as expected
- Sources: ECB all but rules out a July cut. A September but is unclear
- Atlanta Fed GDPNow growth estimate for Q2 bounces to 2.6% from 1.8% previously
- Nvidia turns down on day and so does NASDAQ index
- Canada Ivey PMI index seasonally adjusted 52.0 versus 63.0 last month
- ECB Pres. Lagarde press summary and a look at the EURUSD price action.
- Kickstart the FX trading day for June 6 w/a technical look at the EURUSD, USDJPY & GBPUSD
- ECB's Lagarde: Rate cut today is justified by confidence in the path ahead
- ECB's Lagarde: We are not pre-committing to a particular rate path
- US international trade deficti for April $-74.6 billion versus -76.1 billion estimate
- US initial jobless claims 229K vs 220K estimate
- US Q1 revised non-farm productivity +0.2% vs +0.3% q/q prelim
- Canada April trade balance -$1.05 billion vs -$1.40 billion expected
- ECB cuts he is straight by 25 basis points in a month a policy meeting, as expected
- The full statement from the June 2024 ECB rate decision
- The CHF is the strongest and the NZD is the weakest as the NA session begins
- ForexLive European FX news wrap: Markets pensive awaiting ECB, US weekly jobless claims
- US May Challenger layoffs 63.82k vs 64.79k prior
The ECB pressed on with the 25 basis point cut today taking the main financing rate to 4.24% from 4.4%. It was the first cut rates since 2019. The cut was widely anticipated. However, ECB Pres. Lagarde was reluctant to talk about a future path for rates saying that we are not pre-committing to a particular rate path and that the rate cut today is justified by the confidence in the path to lower inflation ahead. However the ECB president also commented how the path may be a rocky one. Later, ECB sources comments expressed apprehension in the pre-commitment to a rate cut. There was also an understanding that a July cut was likely off the table and that September would be the first chance to reevaluate for another cut.
So although ECB went through with "what they promised" or greatly implied, it was a hawkish cut.
Looking at the strongest to the weakest of the major purchase today, the, EUR ended the day mixed with gains vs the USD, GBP and NZD and declines v the JPY, CHF and AUD. The EUR was nearly unchanged vs the CAD. The Bank of Canada also happened to cut interest rates this week (yesterday).
For the day, the CHF is ending the day as the strongest of the major currency pairs. The USD is the weakest one day ahead of the US jobs report which will be released at 8:30 AM ET tomorrow. The FOMC will meet next week on Wednesday with expectations of no change in policy. Fed officials have already said that they need more information on the path for inflation before contemplating easing policy. They are in no hurry.
The expectations for the jobs report tomorrow are:
- Non-farm payroll estimate 185K (vs 175K)
- Private payroll, 170K vs 167K last month.
- Manufacturing payrolls, 5K vs 8K last month
- Unemployment rate 3.9% est vs 3.9% last month
- Average earnings MoM 0.3% versus 0.2% last month
- Average earnings YoY 3.9% versus 3.9% last month
- Average workweek (hrs) 34.3 versus 3.4% last month
- labor force participation rate:No estimate versus 62.7% last month
- U6 underemployment: No estimate versus 7.4% last month
Ahead of the report, initial jobless claims rose to 229K which was above the expectations of 220K
Canada will also release its jobs report tomorrow with expectations for employment change coming in at 24.8K with the unemployment rate rising to 6.2% from 6.1% last month.
Today, the US stock market traded up-and-down ahead of the key events ahead.
- Dow Industrial Average average rose 0.20%
- S&P index fell -0.02%
- NASDAQ index fell -0.09%
Recall from yesterday, both the S&P and NASDAQ index closed at record levels.
In Europe today, the major indices moved higher led by the Italy's FTSE MIB (+0.95%). Spain's Ibex rose by 0.80% and Germany's DAX rose 0.41%.
In the US debt market, yields are in the day little changed. The 10 year yield has moved from 4.638% last Wednesday to 4.289% currently – a decline of -35 basis points. For today:
- 2 year 4.730%, -0.1 basis points
- 5 year 4.301%, -0.5 basis points
- 10 year 4.289%, changed
- 30-year 4.436%, -0.5 basis points
The price of crude oil moved higher today in trades at $75.63. With one day to go in the week, the price is below its 200 week moving average at $75.97. A close below that moving average level would be the first since January 2021. This article was written by Greg Michalowski at www.forexlive.com.
