Morning Note: A round-up of today's market news.
Market News
The yield on the US 10-year Treasury note has surged to the 4.45% mark, rebounding sharply from the two-month low of 4.27% as a strong jobs report supported a hawkish outlook for the Federal Reserve. The US economy added a new 272k jobs in May, soaring above market expectations of 180k to underscore the resilience of the US labour market to the prolonged period of restrictive interest rates by the Federal Reserve. The results supported the case for a lower magnitude of rate cuts by the Fed this year should inflation refrain from slowing to the central bank’s target, driving markets to expect one sole rate cut this year. Investors are now looking forward to the Fed’s interest rate decision and key US inflation data due on Wednesday.
Meanwhile, the gold price has moved below $2,300 per ounce, hovering at its lowest level in a month. Adding to the bearish sentiment following the jobs data, China’s central bank paused gold purchases in May after an 18-month streak of consecutive buying.
US equity markets ended the week on a muted note – S&P 500 (-0.1%), Nasdaq (-0.2%) – and are currently expected to open slightly down this afternoon. This morning in Asia, China and Hong were closed for holiday, while the Nikkei 225 rose by 0.9%. Japan’s economy contracted less than estimated in the first quarter, shrinking an annualised 1.8% versus the preliminary 2% reading.
The FTSE 100 is currently trading 0.6% lower at 8,198, while sterling buys $1.2711 and €1.1814. The Telegraph reports that UK-listed Ashtead is mulling a listing move to US from London.
The euro fell to its lowest in a month after French President Emmanuel Macron called a snap legislative ballot in a bid to stop the rise of Marine Le Pen after a crushing defeat in EU elections. The most likely outcome may be that Macron’s party and its allies lose seats but remain the largest force in parliament, Bloomberg Intelligence said. European stock futures and French bond futures also declined.
The oil price ticked up to $79.85 a barrel. The world is flying again, and jets are burning fuel like it’s 2019. About 10.5m flights are scheduled to crisscross the skies in the third quarter, BloombergNEF said, and the IATA is anticipating record passenger numbers this year.
Apple’s AI push will offer future devices and features that include a robot for chores, a Siri revamp and camera-equipped AirPods. The company is expected to debut the second version of its Vision Pro operating system at its developers’ conference.
Elliott has built a stake of almost $2bn in Southwest Airlines and plans to push for changes, the WSJ reported.
Source: Bloomberg