It’s jobs day, no breakthrough on Mexico and China prepared for worsening trade war. Here are some of the things people in markets are talking about today.
Today’s employment numbers are hotly anticipated after the surprisingly bad ADP data released on Wednesday showed May was the worst month for private companies adding workers since 2010. Economists are forecasting 175,000 new positions filled in the month, but there seems to be little agreement on what a large miss in either direction would mean for markets. The unemployment rate is projected to remain at a 49-year low of 3.6% while annual wage gains hold for a third month at 3.2% when the numbers are released at 8:30 a.m. Eastern Time.
In Pence negotiations
Talks between the U.S. and Mexico are set to continue into a third day in a bid to reach an agreement that would stop the imposition of 5% tariffs on American imports from its southern neighbor on Monday. Mexican Foreign Minister Marcelo Ebrard confirmed that his government has offered to send about 6,000 national guard troops to Mexico’s southern border with Guatemala to help stem migration, while Vice President Mike Pence said it is still the U.S. plan to go ahead with the tariffs. He said he would talk to President Donald Trump over the weekend to update him on developments ahead of the deadline.
People’s Bank of China Governor Yi Gang said his country has “tremendous” monetary and fiscal policy space to make adjustments to the economy should the trade war worsen. He also said that his meeting this weekend with U.S. Treasury Secretary Steven Mnuchin would probably be a “productive talk, as always.” China’s markets are closed for a holiday today, but the offshore yuan fell the most in three weeks to trade at the weakest level since November, in the wake of the governor’s comments.
Overnight, the MSCI Asia Pacific Index climbed 0.1% while Japan’s Topix index closed 0.5% higher to cap the gauge’s best weekly advance in two months. In Europe, the Stoxx 600 Index had gained 0.8% by 5:45 a.m. as investors in the region remain positive in the wake of the latest ECB decision, while oil companies got a boost from rising crude prices. S&P 500 futures are pointing to a positive open ahead of jobs data, the 10-year Treasury yield was at 2.122% and gold held its recent gains.
A barrel of West Texas Intermediate for July delivery was trading at $53.20 at 5:45 a.m., bringing its two-day advance to more than 3% after Saudi Arabia and Russia reiterated their commitment to work together to keep the global market balanced. The kingdom’s top oil official said he was sure that OPEC and its allies would agree to extend production cuts into the second half of the year after holding talks in St. Petersburg. In non-OPEC oil news, the weekly Baker Hughes U.S. rigcount is due at 1:00 p.m.