Recent economic data signaled a continuing recovery in the US and the eurozone, but once again increased concerns about increasing inflationary pressure and the expectation of when the big three central banks, Fed, ECB and Bank of Japan, will be forced to tighten interest rates. The Dow Jones Industrial remained stable at 34'577.04 points (-0.07%) ahead of the labor market report expected today, while the S&P 500 declined -0.36% to 4'192.85 points. There was more pressure on the technology exchange Nasdaq, which recorded daily losses of around -1%. The negative guidance from overseas somewhat dampened the mood on most Asian stock exchanges at the end of the week, but investors held back ahead of the US labor market report.
According to the latest report of the labor market service provider ADP, the US private sector created almost one million new jobs in May. This is significantly more than the +650'000 expected by analysts. Particularly many jobs were created in the service sector. The data from ADP represent a promising indication for this afternoon's (14:30 CET) eagerly awaited official labor market report. The consensus forecast puts an increase of +650'000 in prospect, after the job growth in April had disappointed with “only” +266'000.
Supported by the solid state of the industrial sector and increased business activity in the service sector thanks to the easing of the corona measures, the US economy continued to gain momentum in May. The IHS Markit Purchasing Managers' Index (PMI) for the private sector – industry and service providers combined – rose to 68.7 points from 63.5 in April. The survey data suggest that the US economy will post rapid, possibly double-digit, growth in the second quarter, said IHS Markit Chief Economist Chris Williamson.
In the euro area, the composite purchasing managers' index reached its highest level since February 2018 in May, with the composite private sector indicator (PMI Composite) improving from 53.8 to 57.1 points. According to IHS Markit, sentiment brightened in both the industrial sector and the services sector, which was hit hard by the corona restrictions. With the easing of the pandemic measures, the outlook for the euro economy has improved significantly. “The revival of the services sector is accompanied by a booming industrial sector, which means that GDP should grow strongly in the second quarter of 2021,” IHS Markit commented.
The seven leading industrialized nations, or G7, are planning a global infrastructure partnership, according to a report in German newspaper “Handelsblatt.” This is to be discussed at next week's planned summit in London. The G7 is to commit up to USD 2.7bn to “major climate-friendly construction projects in emerging and developing countries,” thus also creating a counter-proposal to the “new Silk Road” being pushed by China.
|09:00||SZ||Speech SNB President Thomas Jordan|
|11:00||EZ||Retail Sales (April, y/y)||+12.0%|
|13:00||EZ||Speech ECB President Christine Lagarde|
|13:00||US||Speech Fed Governor Jerome Powell|
|14:30||US||Non-Farm Payrolls (May)||+266,000|
|14:30||US||Unemployment Rate (May)||6.1%|
|14:30||US||Average Hourly Earnings (May, y/y)||+0.3%|
|US||Apple Developer Conference WWDC|
|US||Pharma Conference ASCO|
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