Oil continued its wild ride overnight but may be getting washed out as WTI has bounced back above $45.00 toward $45.50 after plunging down toward $43.75 overnight. Traders continue to finally adjust to the problem that OPEC production cuts have been replaced by higher US supply and because of this, additional cuts from the cartel are unlikely.
Generally negative sentiment toward commodities in general hasn’t been helping either. Base metals are down again today with nickel falling 2.3% and copper falling another 1.0%. Concern about the potential impact of a weakening China and a soft US economy on resource demand has given the b bears reason to growl.
Stock markets are mixed with US index futures up slightly and European indices down slightly. EUR is also down slightly. European markets are up huge ahead of Sunday's second and final round of French Presidential voting. Although Macron is widely expected to score a runaway victory, some traders appear to be starting to lock in profits ahead of the result. This could be to avoid getting caught by a surprisingly strong performance form Marine Le Pen or to get ahead of potential profit-taking on a Macron win.
This morning brings US nonfarm payrolls one of the biggest announcements of the week. Last month payrolls came in shockingly low at 98K, way below street and ADP. This time the street is expecting 190K, slightly above Wednesday’s ADP payrolls which fell back toward 175K. I think we could get a strong upward revision to last month of about 40K. Jobless claims have remained low so I also think we could see an increase of 175K
Canada employment is also out Friday morning. After several months of coming in low and calling for declines, the street has moved up its forecast to 10K. I think 20K similar to last month is reasonable.
Today also brings the return of Fed speakers with a big slate including Chair Yellen and Fed Chair Yellen. As with payrolls and other economic report, traders are likely to assess their comments through the lens of whether a June rate hike is still on or not. Last week’s weak GDP report suggested no while Wednesday’s FOMC meeting statement suggested yes. The Fed is in a particular bind at the moment as a looming budget battle and potential government shutdown means that September is likely off the table for a move.
Corporate News
Activision Blizzard $0.31 vs street $0.21
CBS $1.04 vs street $0.95
Economic News
Significant announcements released overnight include:
Australia construction PMI previous 51.2
Australia RBA monetary policy statement
Upcoming significant economic announcements include:
8:30 am EDT US nonfarm payrolls street 190K vs previous 98K
8:30 am EDT US private payrolls street 188K vs previous 89K
8:30 am EDT US manufacturing payrolls street 10K
8:30 am EDT US unemployment rate street 4.6%
8:30 am EDT US average hourly earnings street 2.7%
8:30 am EDT Canada jobs change street 10K vs previous 19K
8:30 am EDT Canada full-time jobs previous 18K
8:30 am EDT Canada part-time jobs previous 1K
8:30 am EDT Canada unemployment rate street 6.7%
10:00 am EDT Canada Ivey PMI previous 61.1
11:30 am EDT FOMC Fischer speaking
12:45 pm EDT FOMC Williams speaking
1:30 pm EDT FOMC Rosengren, Evans, Bullard panel discussion
1:30 pm EDT FOMC Yellen speaking
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