Macro Roundup (Jun 7)

SHANGHAI, Jun 7 (SMM) — This is a roundup of global macroeconomic news last Friday and what is expected today.

The dollar fell on Friday after US nonfarm payrolls data showed hiring increased in May as the pandemic eased, but not as much as expected, tempering expectations the Federal Reserve will tighten monetary policy sooner, rather than later.

Nonfarm payrolls increased by a solid 559,000 jobs last month, helped by higher COVID-19 vaccination rates, but that was below the consensus forecast for 650,000 jobs added in May.

The softer-than-expected report means there is no urgency for the Fed to begin tapering its monthly purchase of $120 billion in bonds to support the economy, he said.

Despite May’s gain, nonfarm payrolls remained 5%, or 7.6 million jobs, below their pre-crisis level, Jocelyn Paquet, an economist at the National Bank of Canada, said in a client note.

“There is, therefore, still a long way to go for the labor market,” she said.

On Wall Street, stock futures are flat as the S&P 500 attempts to make a run at a record high last week amid optimism about the economy’s ongoing reopening this summer.

S&P 500 futures added less than 0.1%. Dow Jones Industrial average futures gained 15 points, or less than 0.1%. Nasdaq Composite futures rose less than 0.1%.

The S&P 500 sits just 0.2% from its intraday record high earlier in May. The benchmark advanced 0.6% last week to bring its 2021 gains to more than 12%. The Dow and Nasdaq also posted gains last week.

Investors are focused on inflation data in the week ahead, with May’s Consumer Price Index (CPI) scheduled to be released Thursday. In April the CPI rose 4.2% from the previous year, the fastest increase since 2008. If prices continue to rise it could cause the Federal Reserve to step back from its easy policies.

Oil extended gains on Friday, topping $72 a barrel for the first time since 2019, as OPEC+ supply discipline and recovering demand countered concerns about patchy COVID-19 vaccination rollout around the globe.

The Organization of the Petroleum Exporting Countries (OPEC) and allies on Tuesday said they would stick to agreed supply restraints. A weekly supply report on Thursday showed U.S. crude inventories dropped more than expected last week.

Brent crude rose 0.8% to settle at $71.89. It reached an intra-day high of $72.17, the highest since May 2019. U.S. West Texas Intermediate crude gained 1.18% to settle at $69.62 per barrel and earlier touched $69.76, the highest since October 2018.

Gold rebounded from a more than two-week low on Friday after U.S. nonfarm payrolls did not rise as much as expected, although bullion was still on course to register its biggest weekly decline since March.

Spot gold jumped 1% to $1,889.27 per ounce by 1:46 p.m. EDT (1746 GMT), having earlier in the day hit its lowest since May 19 at $1,855.59. It was down 0.7% for the week so far.

US gold futures settled up 1% at $1,892.

The pan-European Stoxx 600 index finished the final trading session of the week up about 0.4%, with most major bourses and sectors pushing into positive territory.

Job creation disappointed again in May, with nonfarm payrolls up by what normally would be considered a solid 559,000, but still short of lofty expectations.