Traders keep bets on June rate hike after jobs report

Cornelia Mascio
Giugno 3, 2017

Consistent with the ADP ADP report was significant growth in new Construction jobs.

The ISM manufacturing index edged higher to 54.9 from 54.8 the previous month which continued to suggest solid progress in the industrial sector.

The dollar JPY= firmed to 111.52 yen, from Wednesday's near two-week low of 110.485 yen.

GBP/USD is supported in the range of 1.2824 levels and now trading at 1.2880 levels.

The four-week moving average of continuing claims dropped 16,000 to 1.91 million, the lowest level since January 1974.

Narrow ranges prevailed during the European session as markets waited for the latest USA data releases. By 1930 GMT, the pound was last trading flat against the greenback at $1.2878.

Gold prices are lower in pre-U.S. session trading, amid the "risk-on" appetite seen in the world marketplace so far Friday. Many world stock markets are also at or near record highs. Analysts had forecast a shortfall of just C$70 million.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS ticked up 0.1 percent, while Japan's Nikkei .N225 gained 1 percent to top the psychologically important 20,000-point level for the first time since August 2015.

USD/JPY is supported around 110.00 levels and now trading at 110.43 levels.

The U.S. dollar fell to seven-month lows on Friday after data showed the U.S. economy created fewer jobs than expected in May, but equity investors shrugged off the news, lifting leading American, British and German stock indices to fresh records.

Data showed that USA nonfarm payrolls increased just 138,000 last month as the manufacturing, government and retail sectors lost jobs. March and April data was revised to show 66,000 fewer jobs created than previously reported. The unemployment rate is forecast to be unchanged at a 10-year low of 4.4%.

Dow e-minis were up 11 points, or 0.05 percent, with 19,927 contracts changing hands.

The other "outside market" on Friday morning finds the USA dollar index near steady. The stronger ADP number on Thursday now has many thinking Friday's more important USA non-farm jobs number could be a miss to the upside, too. "Since January, the unemployment rate has declined by 0.5 percentage points, and the number of unemployed has decreased by 774,000", the BLS said. The US dollar rose against a basket of currencies, while US Treasury debt prices fell slightly.

Asian stocks edged up on Friday and the dollar bounced from recent lows as upbeat data on US manufacturing and employment and buoyant European factory growth boosted investor optimism. Both later trimmed gains but closed the day higher.

Slower U.S. population growth is dragging on the economy and the rate of inflation, said Russell Price, senior economist at Ameriprise Financial Services Inc in Troy, Michigan. The index hit a 2-1/2-year high of 57.7 in February amid optimism over President Donald Trump's pro-business policy proposals.

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