| ON DECK FOR THURSDAY, JUNE 13 |
KEY POINTS:
- European markets catch up to the Fed
- Little US market follow through on FOMC, US CPI
- Australian jobs beat expectations
- US to auction 30s in another test of bond appetite
- US PPI, claims on tap
- BoC’s Macklem, Kozicki probably offer low risk today
There is mixed follow through this morning on yesterday’s developments that included weaker US CPI (here) and FOMC communications (recap here) that really just said watch the data as they hedged on 25 or 50bps of cuts this year.
US Ts are little changed. Gilts and EGBs are underperforming, however, as yields climb a few basis points across maturities and countries and they are probably just playing catch-up to the Fed that landed after the European close. Stocks are mostly lower except for flat US futures. The dollar is little changed.
AUSTRALIA’S JOB MARKET
Australia gained about 40k jobs last month (30k consensus) and the mix was solid as they were all full-time (42k). The unemployment rate ticked lower to 4% and the participation rate moved up with revisions in April to 66.8% and held steady in May. This gain followed a similar gain of 37k the prior month and a year-to-date rise of 230k jobs. The job market remains strong (chart 1) and the unemployment rate is about a half point off the bottom (chart 2).
That caused mild cheapening in Australian 2s of about 2bps but this effect was overwhelmed by a drop at the Australian open that was fed by the previous day’s US developments, namely CPI, leaving the yield about 6bps lower on the session. The A$ is underperforming other majors relative to the USD.
US Data, Fed– and Treasury-Speak on Tap
US core producer prices for May are expected to post a mild gain (8:30amET). US weekly jobless claims are also on tap (8:30amET).
The US will auction 30s in a US$22B reopening at 1pmET.
Fed-speak brings out NY Fed President Williams who will appear with Treasury Secretary Yellen at the Economic Club of New York (12pmET).
More BoC Jawboning
BoC-speak is back again. Macklem will do a fireside chat with no text, press conference, or audience Q&A this afternoon after his appearance yesterday said nothing new (1pmET). One of his deputies will give a history lesson on what they did during the pandemic this morning (9:50amET).
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