Business

The markets opened weak yesterday when the ECB announced no new policies.

The ECB is out of options. Mario Draghi has cut rates into NIRP four times and spent nearly €1 trillion in QE. Looking at the EU’s inflation rate, you wouldn’t think the ECB had done anything.

Inflation peaked at 0.2% and is now negative again. Spot the impact of the ECB’s policies… you can’t.

Fortunately,  “someone” manipulated the markets higher after the ECB disappointed.

In less than an hour, the BLS will report the latest, May, non-farm payrolls and unemployment data. Here is what consensus expects:

• US Change in Nonfarm Payrolls (May) M/M Exp. 160K (Low 90K, High 215K, Prey. 160K, March. 208K)
• US Unemployment Rate (May) M/M Exp. 4.9% (Low 4.9%, High 5.1%, Prey. 5.0%, March. 5.0%)
• US Average Hourly Earnings (May) M/M Exp. 0.2% (Low 0.1%, High 0.4%, Prey. 0.3%, March. 0.2%)

The NFP breakdown by bank is as follows:

• World stocks edge toward one-month high; U.S. jobs data eyed for Fed clues (Reuters)
• Commodities Stand on Brink of Bull Market After Oil’s Recovery (BBG)
• Brent crude oil holds above $50 on signs of rebalance (Reuters)
• Clinton attacks Trump's foreign policy as a threat to U.S. safety (Reuters)
• Trump strikes back at Clinton's 'phony' speech (Hill)
• "We want food!', Venezuelans cry at protest near presidency (Reuters)
• Employers in U.S. Moderating the Pace of Hiring (BBG)

The world passed a historic milestone in the past week when according to Fitch negative-yielding government debt rose above $10 trillion for the first time, which as the FT adds envelops an increasingly large part of the financial markets "after being fuelled by central bank stimulus and a voracious investor appetite for sovereign paper." It also means that almost a third of all global government debt now has a negative yield.

After yesterday's two key events, the ECB and OPEC meetings, ended up being major duds, the market is looking at the week's final and perhaps most important event of the week: the May payrolls report to generate some upward volatility and help stocks finally break out of the range they have been caught in for over a year. However, even today's jobs number will likely be skewed as reported previously as a result of the Verizon strike which is said to trim some 35,000 jobs from the headline print, casting anything the BLS reports today in doubt.