Daily Digest:
w/c 24th June - a relatively light data week, with spotlight on US GDP and Durable Goods Wednesday, then the Fed’s preferred inflation measure, the MoM and YoY PCE data on Friday

“Risk On” with Debt Ceiling Raised and Positive US Employment Report  

Intermediate

Macroeconomic/ geopolitical developments

  • The debt ceiling was lifted, and the US avoided a catastrophic default.
  • Fed speakers this week have been more dovish. Harker (centrist) said on Thursday that it was “time to at least hit the stop button”, whilst Jefferson (a permanent voter and historically a leaning to hawkish), spoke about the potential to “skip” a rate hike in June.
  • Nonfarm Payrolls beat expectations again. The headline jobs number smashed expectations by 144K, with upward revisions of 93K from the prior two months. There were 237K more jobs created by the US economy than expected.
  • Unemployment jumped, but average hourly earnings dipped and with wage growth falling, this is encouraging for the Fed.
  • US ISM Manufacturing PMI data points to a growing slowdown.
  • But faltering Chinese PMIs have reflected a faltering economic recovery in China over recent months.
Debt Ceiling

Global financial market developments

  • The major US stock averages, leapt higher with the Nasdaq and S&P 500 hitting multi-month highs.
  • European indices rebounded from early losses for the week, underperforming their US counterparts, but the German Dax is moving back close to its record level.
  • The Japanese benchmark, the Nikkei 225 hit another new multi decade high to levels not seen since the 1990s.
  • US and European Bond yields plunged, reversing previous higher yield moves.
  • The US Dollar Index faltered back from near a multi-week high.
  • A Gold rebound faltered.
  • Oil rebounded as US debt default is priced out.

Key this week

  • Central Bank Watch: The Fed has entered its blackout period ahead of the June 14 FOMC decision. We get the Reserve Bank of Australia RBA and the Bank of Canada (BoC) monetary policy decisions, statements, and press conferences on Tuesday and Wednesday respectively.
  • Macroeconomic data: Data is light, with the focus this week on Monday’s global Services PMI data from S&P Global and the US ISM Services PMI.
DateKey Macroeconomic Events
05/06/2023S&P Global Services PMI global data and from US ISM Services PMI, US Factory Orders
06/06/2023Reserve Bank of Australia monetary policy
07/06/2023Australian GDP; China Trade Balance; Bank of Canada monetary policy
08/06/2023US Weekly Jobless Claims
09/06/2023China CPI and PPI, Canadian Unemployment, US Treasury Currency Report

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

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