Fed Mester News Today

Eco releases remain second tier today, but the number of central bank speakers increases with especially Fed Waller discussing the US economy. Waller was one of the first and most prominent (rumoured candidate as next Fed chair) Fed-members to talk out in favour of keeping rates higher for longer.

It’s all about March US payrolls today with consensus expecting another decent job growth of 214k in combination with a slightly lower unemployment rate (3.8% from 3.9) and firm wage pressure (0.3% M/M & 4.1% Y/Y). The rather high consensus bar and this week’s failed test push US yields through the roof suggests that those levels will be able to hold into this week’s close. The dollar proved to be vulnerable when the long end of the curve underperformed (rising inflation expectations?!...

Asian equities mostly trade with modest gains this morning. Chinese investors still ponder the impact of the authorities to arrest the equity sell-off (CSI 300 +0.63%). Later today, there are again few data with market moving potential in US and EMU. We look out whether there are any further spill-overs of Moody’s cutting the rating of New York Community Bancorp to junk to broader (US) equity sentiment. Fed speakers include governors Kugler, Collins, and Barkin. In an interview with the FT, EC...

US markets might still be more sensitive to weaker data. This especially might be the case for the dollar. Interesting to see whether EUR/USD can regain the 1.10 barrier. USD/JPY also looks vulnerable sub 147.

Gold price (XAU/USD) didn't find buying interest despite downbeat United States labor market data. The US Automatic Data Processing

Gold price (XAU/USD) turned lackluster after defending the critical support of $1,900.00 on Monday. The precious metal consolidates as investors prepa

Official May Chinese PMIs underwhelmed this morning. The manufacturing PMI unexpectedly ventured deeper in contraction area, from 49.2 to 48.8 (49.5 expected) with every sub indicator but one (delivery time) printing lower compared to April. Non-manufacturing business confidence eased from 56.4 to 54.5, still above the neutral 50 but less than the 55.2 consensus estimate. New orders slumped 6.5 points to 49.5 and employment remains stuck <50 (48.4). Business activity expectations remain at a ...

The US debt ceiling stalemate remains firmly in place with US Treasury Secretary Yellen’s warnings proving futile for the moment. Apart from the US T-Bill and CDS market, the overall market impact remains low even as we’re only a fortnight away from the assumed “X-date”. Previous debt ceiling episodes learnt that a solution will eventually follow. Today’s eco calendar is extremely thin with only US housing starts and building permits.

The UK labour market report displayed strength in the first quarter by adding 182k jobs (160k expected) compared to the 2022Q4. The unemployment rate unexpectedly edged up, from 3.8% to a still historically low level of 3.9%. Wage growth accelerated slightly to 6.7% y/y in Q1. This news suggesting a very tight labour market was counterbalanced by the accompanying preliminary job growth estimate for April.

US stocks are declining as earnings and economic evidence suggest wage growth is still too high and will keep inflation sticky. ​ Earnings alone are dragging