A huge month of knowledge will probably support the market trends

A batch of stories may stream in a short period on July 1st. There will be only half a day of trading in America on July 3 and the market will remain closed on July 4. On the other hand, there is a complete information The slate, with Fed ministers, includes the first round of the French election and the UK general election.

The results of this information flow could possibly have the most significant impact on currencies and fee markets. It appears that the characteristics of upward charges behind the curve and the more powerful buck that began in early 2024 are more likely to strengthen further.

french election

The first round of French parliamentary elections is on June 30, and European markets were worried, as seen by the widening spread between French and German rates. The flow spread of 80 bps is the best since the European debt crisis.

Even the spread between the 30-day implied volatilities of the S&P 500 and the Stoxx 50 index has increased. The Stoxx 50’s implied volatility range has increased materially since mid-June, indicating divergence between US and European markets.

American wisdom

Meanwhile, US information flows will begin on Monday morning with the ISM production record, with the sector expected to show a continued rise for June, rising to 49.2 from 48.7 in May. Meanwhile, the cost payment index is expected to fall to 55.8 from 57, with the turnover coming in at 50 as against 51.1 closing moment.

JOLTS data comes out Tuesday and is expected to fall to 7.86 million from 8.06 million in May. This knowledge has always been difficult to anticipate and often comes with significant modifications. On the other hand, a sunny factor is that the choice of work openings is decreasing. Certainly the data suggests that the trend in job vacancies may continue in May, but it also shows that the decline in job vacancies may stop in June.

NFIB business information shows that hard-to-fill jobs likely ticked up in May. This may be something to look for in the JOLTS data for June as the NFIB data appears to control the JOLTS data.

ADP business is expected to report 158,000 jobs in June, up from 152,000 in May. ADP information is still a privileged predictor of the coveted government document and should be considered an independent measure of business. The two stories don’t even move in the same direction at times.

Pay increase information from ADP may provide some insight as it is broadly trending in line with BLS pay increase values, and both ADP and BLS pay increase information have flattened out in recent months. For the Fed to see further declines in inflation, it would need to see wage growth decelerate, so the ADP document will likely provide insight into what is and isn’t happening.

Fed and UK elections

Strangely, when equity markets close on July 3, Fed ministers will be excused at 2 pm ET. The Fed minister probably won’t provide a lot of new information about what the Fed is thinking today, especially since we talk to Max on an almost regular basis. Fed ministers are more likely to acknowledge the welcome inflation data, although they are also more likely to signal that the work is incomplete and the reduction in the primary price scale is not expected to come until the end of 2024.

Meanwhile, the United Kingdom general election will be held on July 4, with the Labor Party in the sunlight. There probably won’t be much fear over the French and UK elections, although so far, those pending elections have weighed on the euro and pound currencies against the buck.

The lack of an environment of certainty about the potential outcomes for each unit of elections has helped break the buck index out of a year-long consolidation trend.

working knowledge

In fact, the work-related information we’ll receive on the morning of July 5 will be the highlight of a highly trim day. 188,000 jobs are expected to be created in June, down from 272,000 in May. Meanwhile, the unemployment rate is projected to remain at 4.0%. Additionally, wage growth will likely slow to 0.3% per month, down from 0.4% in May, while the generation rate will remain unchanged at 4.0% y/y.

Analysts have not been excellent at predicting BLS job information. Since January 2022, analysts have overestimated the number only four times, so the BLS working paper has a cast history of being hotter than expected.

Running claims information for this month has begun to emerge, clearly breaking out of the somewhat tight zone it was in during the summer of last year. This could herald additional significant increases in the unemployment rate in the near term; It does not appear that the unemployment rate increased significantly in June.

Remembering that non-farm payrolls and unemployment values ​​come from other surveys may be very important. The unemployment rate comes from the Household Survey, and one reason for the increase in the unemployment rate in May was not only due to the emergence of unemployed countries, but also due to the reduction in the size of the labor force. The number of unemployed workers increased by 157,000, while the size of the labor force fell by 250,000. Therefore, it is possible that based on measures of the labor force, the unemployment rate could decline as when accounting for rounding, the latest unemployment rate was 3.96% in May.

If analysts are certainly underestimating the non-farm payrolls numbers once again, ERA wage growth remains a bit flat, with unemployment remaining unchanged. It seems likely that the softness in export markets will not be noticeable in the June efforts document, and this may help generate tariffs. The gains seen after the inline PCE document on June 28 have maintained the uptrend since the beginning of 2024.

Overall, it will probably be a short but surprisingly busy day. Markets may have difficulty digesting all the information at once, but more importantly, the signs of higher rates and more powerful bucks that have been in the park since the beginning of the year need to continue.