For the week of June 6 to 10
Nonfarm Payrolls data released in the United States on Friday were much weaker than expected, gaining only 38,000 jobs in May. Expectations were for a rise of 164,000 for the month. This is the smallest amount of new hires since 2010. Although the unemployment rate ticked down to 4.7 percent the reasoning is likely individuals leaving the labor force.
The Fed will certainly be taking this data into consideration and the chances of a hike in June and July have fallen significantly. Markets now see only a 27 percent chance of a July rate hike after the likelihood sat above 50 percent as near as a week ago. The chance of a June hike now sits at 4 percent. Markets will be expecting a comment on employment numbers from Janet Yellen today when she speaks in Philadelphia. Governor Stephen Poloz expressed his opinion that Friday’s Nonfarm results are not a “conclusive” indication of anything.
The price of oil is fighting back this morning after ending last week down following an OPEC meeting where no resolutions were made. Prices are up 2.34 percent to $49.76 per barrel this morning. After a boost late in the week from weak U.S. employment numbers, the Canadian dollar is trading slightly up against the U.S. dollar this morning. Todays expected range is 1.2868 – 1.2968.
The pound has been slumping (to a three week low) after recent polling shows more support for Great Britain leaving the European Union. A recent poll shows 45 percent of individuals backing the “leave” side while only 41 percent are backing the “stay” side. The final vote is set to take place on June 23 and financial institutions such as the International Monetary Fund have spread warnings of the unfavorable implications of a “leave” decision.
Employment data will be released for Canada on Friday and may show some of the first signs of recent wildfires in Alberta. Additional releases out of Canada this week include housing starts and building permits, both expected on Wednesday. In the United States, releases are expected for wholesale inventories, University of Michigan sentiment, and the Monthly Budget Statement.
Posted by Concentra Financial Markets