- Feds Jefferson: Skipping a rate increase would allow Fed officials to see more data
- Harker: I am in the camp that we can skip a meeting
- US April JOLTS job openings 10.103m vs 9.375m expected
- Beige Book: Contacts across districts noted some cooling in labor market
- Canada Q1 GDP +3.1% vs +2.5% expected
- Germany May preliminary CPI +6.1% vs +6.5% y/y expected
- Fed's Collins: Fed is intent on reducing inflation
- SNB's Jordan: We need to bring inflation below 2% as soon as possible
- OPEC output fell 460k bpd in May - survey
- OPEC leaves major newswires off the invite list for the upcoming meeting
- Fed's Bowman: Residential real estate 'appears to be rebounding'
Markets:
- Gold up $4 to $1936
- US 10-year yields down 8 bps to 3.61%
- WTI crude oil down $1.50 to $67.96
- CAD leads, CHF lags
- S&P 500 down 25 points to 4190
It was a lively end to May as the market wrestled with economic data and commentary from Fed speakers. The dollar initially fell on a sharp drop in the Chicago PMI but it rallied even more almost immediately afterwards on a strong JOLTS report. Later though, it fell to the worst levels of the day as Jefferson and Harker delivered similar (coordinated?) message within minutes of each other.
With that, USD/JPY fell to 139.31 from as high as 140.37 post-JOLTS. The Fed funds futures market went from pricing in a 70% chance of a June hike to just 30% in the wake of the comments.
The pound was particularly perky, perhaps due to EUR/GBP flows. The euro rose 50 pips from the lows on the Fed comments but still lower by 50 pips on the day as German inflation was soft and highlighting the possibility that the ECB ultimately cuts before the Fed.
Oil fell sharply for the second day but the loonie was the top performer as Canadian GDP beat estimates and put a hike next week squarely on the table.
AUD and NZD finish the day modestly lower but well above session lows. There are growing worries about China and commodity prices plaguing the pair.
