Eyes on US jobs as Fed/ECB gap narrows on US outlook [Video]

As widely expected, the European Central Bank (ECB) announced a 25bp rate cut when it met yesterday, but raised its inflation target for this and the next year, warned that the road for easing inflation could be bumpy, and ruled out a July rate cut. Still, two G7 central banks announced a 25bp rate cut this week, and marked the beginning of the easing cycle for major central banks and proved to be supportive of reflation flows: oil and metals rebounded. The S&P500 hit a fresh record.

Today, all eyes turn toward the US jobs data. The week was marked by softer-than-expected job openings in April, a significantly lower-than-expected May ADP report, a surprise decline in the pace of unit labour costs from 4.7% to 4% and an unexpected jump in US weekly jobless claims. The consensus of analyst estimates on Bloomberg bet that the US economy may have added around 180K new nonfarm jobs last month, the unemployment rate is seen steady near 3.9% and wages growth may have slightly accelerated on a monthly basis. A soft jobs report should support the dovish Fed expectations and further weigh on the US dollar.

Elsewhere, Nvidia eased after hitting a fresh ATH yesterday, and Microsoft consolidated gains above $420 a share on news that the US opened antitrust investigations into two of the world’s most valuable companies due to their dominance in the rapidly emerging field of AI. GameStop jumped 47% on Roaring Kitty which is the only reason the stock rises these days.