The dollar has posted fresh highs for a fifth consecutive day, pegging a three-month high at 92.70 by the measure of the DXY narrow trade-weighted index. The greenback has lifted by nearly 1% on the week so far, and by 3.5% from the low that was seen in late May. Dollar gains this week have come despite U.S. Treasury yields flatlining.
Crude prices have since settled near $75.50, but remain up by 1.5% from week-go levels, and up by 9.2% from month ago levels. The OPEC+ group yesterday delayed its decision on output quotas, and is aiming to reach an accord later today. Global stock markets have remained buoyant, but mixed. The S&P 500 posted a fresh record peak yesterday, though the Dow and Nasdaq have remain their recent highs, as have indices in Asia and Europe.
The advent of today’s BLS jobs report largely deadened the markets already on Thursday. Treasuries traded either side of unchanged. Longer dated maturities opened with modest gains amid a more cautious tone given rising concerns of the Delta covid variant but those were unwound in afternoon action, leaving rates virtually flat at the close.
However, the 10-year rate held below the 1.50% level for a 4th straight session and nine of the last 10. Wall Street was in rally mode to kick off the second half of the year. More highs were set on the S&P 500 which climbed through the 4300 mark to 4317. Data on ISM manufacturing, jobless claims, and construction spending was ignored in favor of the more crucial employment numbers on the horizon.
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Today’s calendar is all about the June unemployment report, where we expect nonfarm payrolls to rise 550k, versus the previous 559k increase. Hourly earnings are seen rising 0.2% from 0.5% in May, while the workweek is seen steady at 34.9 hours. The unemployment rate should dip to 5.6% from 5.8%. The May trade report is expected to see the deficit widen to -$69.5 bln from -$68.9 bln. May factory orders are penciled in bouncing 1.7% from -0.6% previously.
The Treasury market will close early ahead of Monday’s Independence Day holiday. There are no larger-cap earnings reports due.