Today: ADP Non-Farm Payroll expects 41k added in America, US Core Retail Sales are expected to be 0.3%, and Retail Sales are expected to be 0.5% as spending continues despite inflation. The ISM Manufacturing PMI reading in the US is expected to be 52.3, a slight drop of 0.1 from March. Iran now says it is ready to end the war, but with guarantees, while Trump claims talks are “going well.”
Summary: Inflation and jobs will continue to be the primary focus, with JOLTS and the Canadian GDP suggesting North America continues to fare better than many other regions. Today we will see more employment figures, and inflationary numbers, putting the US in the spotlight.
- The Canadian GDP m/m numbers surprised on Tuesday, showing 0.1% growth as analysts expected there to be no change. Meanwhile, US JOLTS Jobs Openings were as expected, with 6.88 million job openings in the USA.
- Statistics Canada announced on Tuesday that the GDP month-over-month grew by 0.1% in Canada, although the bar for rate hikes remains very high.
- The Bureau of Labor Statistics in the US announced that there are 6.88 million unfilled jobs in the US, adding the possibility that retail spending could continue to drive inflation higher than the Fed’s desired level.
- There are several American economic numbers being released on Wednesday, with the ADP Non-Farm Payroll numbers, or private employment read, expected to show 41,000 jobs added last month. The Core Retail Sales and Retail Sales figures are also being released, with 0.3% and 0.5% being the expected results.
- The war in the Middle East continues to take center stage despite the importance of the US inflation numbers being released. Energy-led inflation shocks led by the effect of Crude Oil prices could be massive, not only in the US, but also trickling through the supply chain.
Despite the possibility of a desire for peace, there is a concern about the distribution of both Natural Gas and Oil. These could continue to see a divergence of pricing in Asia and Europe verses North America spot prices, making the difference in economic performance stark. Recently, there have been outsized losses in equities in countries like India, Germany, Japan, and others which import more than the Americans and Canadians. While most indices gained on Tuesday, the strength of those in countries that import energy was much more impressive, with the exception of India, which continues to struggle.
- US indices recovered after there were reports on Tuesday that Iran was looking for a peace agreement, but there are some concerns as there will have to be guarantees. Early trading on Wednesday in the overnight electronic session suggests there could be follow-through for the bulls, barring any disruptive tweets.
- Metals continue to move counter to the interest rate, with the 10-year yield in America continuing to test the 4.3% floor. As rates have dropped, this has allowed both Gold and Silver to rally. A clear break could send metals even higher. Volatility will be the norm as we try to leave war behind.
- Bitcoin had a bullish session on Tuesday, but more importantly, it continues to see institutional inflows via ETFs. The market has been somewhat resilient, when thought of in terms of what is going on around the world. If rates collapse in the US, its possible BTC could be a dark horse for a bigger move.