The Morning Hark - 6 May 2024
Today’s focus...Brief piece this morning due to the UK Bank Holiday....there will be no further newsletters today but we shall be back tomorrow in full. Thank you and good luck!
Macro Themes At Play
Recap
Norges Bank Rate Decision as expected as they held rates steady at 4.5% and were hawkish in their guidance as they indicated that a tight monetary policy stance may be needed for somewhat longer than planned to curb inflation.
UK Services PMI final print for April was revised a touch up to 55.
EU Unemployment Rate for March bang on at 6.5%.
Canada Services PMI Apr consensus vs previous 46.4 (14.30 BST)
US Services PMI Final Apr consensus 50.9 vs previous 51.7 (14.45 BST)
US ISM Services Apr printed disappointingly with the headline missing both the previous and expectations by quite a margin. The headline came in at 49.4 and its first print in contraction since the end of 2022. The underlying will n to help the Fed’s narrative however with Employment dropping further on the month to 45.9 and, outwith the blip that was December’s number, that is the lowest since the pandemic. New Orders also dipped to their lowest since September to 52.2 whilst Prices continue to defy gravity printing at 59.2.
NFP Review
Hmmm maybe the Japanese did get the tip off that the payrolls number wouldn’t cause a USD rally!
A full house for the Fed. A cooling in the headline number with it coming in at 175k much lower than expectations and the lowest since October in addition the previous two months were also revised lower.
The unemployment rate ticked up to 3.9% and more encouragingly the average hourly earnings ticked down to 0.2% MoM which helped the YoY rate dip below 4%, to 3.9%, for the first time since June 2021.
The Day Ahead
Overnight we got the China Caixin Services PMI for April which came in as expected at 52.5.
Little of note for the rest of the day data wise but we do have some central bank speakers to keep us company. Early tomorrow the RBA Rate Decision and press conference. On hold is expected with a continuing hawkish bias to the commentary.
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Main Highlights Ahead
All times in BST (EST+5 / CET-1 / JST-9)
The main highlights for the day ahead ahead in terms of data and speakers:
Monday
Germany HCOB Services PMI Final Apr consensus 53.3 vs previous 50.1 (08.55 BST)
EU HCOB Services PMI Final Apr consensus 52.9 vs previous 51.5 (09.00 BST)
SNB Jordan Speaks (13.25 BST)
Fed Speakers
Barkin (17.50 BST)
Williams (18.00 BST)
ECB Speakers
Nagel (12.30 BST)
Early Tuesday
Japan Jibun Bank Services PMI Final Apr consensus 54.6 vs previous 54.1 (01.30 BST)
RBA Interest Rate Decision rates to remain on hold at 4.35% (05.30 BST)
RBA Press Conference (06.30 BST)
Good luck.
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