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Trading Radar: ECB to Discuss Negative Rates, Mandate Changes; US Jobs Data to Be Released


Economics, earnings reports, and market events for the week ahead.


Another crazy week for the market and economic data. Treasuries, which had felt bidless for almost two weeks, finally made some kind of move back in the positive direction, but Friday erased all of that. Equities remained on the weaker side throughout the week, staying higher for most of the day on Thursday to work off oversold conditions and then weakened into the close.

Looking ahead to next week, the roller coaster will continue; it's jobs week and we have the Bank of England and ECB rate decisions too. Nonfarm payrolls for May will be released on Friday with the consensus economist expectations calling for a 168,000 rise in payrolls. This seems about right on the money given economic data this month. Thus far, economic data has been more robust in May as a whole, though employment data is on the weaker side. However, I think that April's 165,000 payrolls will be revised lower -- maybe by 20,000 to 25,000, given the other economic data that month and the ADP report of 119,000.

We'll see a preview of what Friday will look like with Wednesday's ISM non-manufacturing and ADP private payrolls report. In theory, given its new enhanced survey measures, the ADP report is more accurate than the NFP report, so it will be a good preview. The employment subset of the non-manufacturing index tends to have the closest correlation to the NFP data, but it is far from perfect.

Fedspeak for the week includes notable speeches from John Williams and Charles Plosser. Plosser is hawkish and has led the tapering push for much of May. Williams, who has been dovish, has turned much more cautious in his speeches lately, so we'll see what he says given the freakout over Ben Bernanke's comments last Friday.

Overseas, the Bank of England will hold its first session with former Bank of Canada Governor Mark Carney in control. Carney has been a moderate central banker and the UK faces more serious problems with its economy than Canada. Lately, conversation surrounding the ECB has been largely about ways to boost lending to small and medium businesses (referred to as SME by the ECB), whether or not a mandate change is in order, and whether a move into negative rates makes sense. (A move into negative rates would certainly be more harmful than beneficial, given the exodus of money on deposit with the ECB, and the fact that rates are already at zero, so they rightly so saw this as not a possibility.)

Earnings season is over now, so there are only a few reports this week. Dollar General (NYSE:DG), Verifone (NYSE:PAY), and Ciena (NASDAQ:CIEN) are notable ones.

Monday, June 3

US Economics (Time Zone: EDT)

08:58 Markit US PMI Final – preliminary 51.9
10:00 Construction Spending MoM – consensus 0.9%, prior -1.7%
10:00 ISM Manufacturing – consensus 50.5, prior 50.7
10:00 ISM Prices Paid – consensus 50.0, prior 50.0
5:00 Total Vehicle Sales – consensus 15.10M, prior 14.88M
5:00 Domestic Vehicle Sales – consensus 11.90M, prior 11.76M
11:30 Treasury selling $30b 3-month bills, $25b 6-month bills

07:20 Williams speaking in Stockholm

Global Economics (Time Zone: GMT)

01:00 CNY Non-manufacturing PMI
01:45 CNY HSBC Manufacturing PMI
08:00 EUR German Manufacturing PMI (2nd estimate)
08:30 GBP Manufacturing PMI


Chimera Investment Corp (CIM)

Tuesday, June 4

US Economics (Time Zone: EDT)

08:30 Trade Balance – consensus -$41.0B, prior -$38.8B
09:45 ISM New York – prior 58.3
10:00 IBD/TIPP Economic Optimism – prior 45.1
11:30 Treasury selling 4-week bills

1:30 George speaking on economy in New Mexico
8:00 Fisher speaking on mon policy in Tokyo

Global Economics (Time Zone: GMT)

01:30 AUD Current Account Balance
04:30 AUD RBA Rate Decision
08:30 GBP Construction PMI
09:00 EUR Eurozone PPI


Dollar General (DG)

Wednesday, June 5

US Economics (Time Zone: EDT)

07:00 MBA Mortgage Index
08:15 ADP Employment Change – consensus 170K, prior 119K
08:30 Nonfarm Productivity (final estimate) – consensus 0.7%, prior 0.7%
08:30 Unit Labor Costs (final estimate) – consensus 0.5%, prior 0.5%
10:00 Factory Orders – consensus 1.5%, prior -4.9%
10:00 ISM Non-manufacturing Composite – consensus 53.5, prior 53.1
2:00 Fed's Beige Book

Global Economics (Time Zone: GMT)

01:30 AUD GDP
01:45 CNY HSBC Services PMI
07:55 EUR German Services PMI (2nd estimate)
08:00 EUR Eurozone Services PMI (2nd estimate)
08:30 GBP Services PMI
09:00 EUR Eurozone GDP 1Q 1st estimate
09:00 EUR Eurozone Retail Sales
12:30 CAD Building Permits


Hovnanian (HOV)
Verifone (PAY)

Thursday, June 6

US Economics (Time Zone: EDT)

07:30 Challenger Job Cuts YoY – prior -6.0%
08:30 Initial Claims – consensus 346K, prior 360K
08:30 Continuing Claims – consensus 3060K, prior 3005K
12:00 Household Change in Net Worth 1Q – prior $1.174trln

08:00 Plosser speaks on economy in Boston

Global Economics (Time Zone: GMT)

07:15 CHF CPI
10:00 EUR German Factory Orders
11:00 GBP BoE Rate Decision
11:45 EUR ECB Rate Decision
14:00 CAD Ivey PMI


Ciena (CIEN)
Conn's (CONN)
Ann (ANN)
Quiksilver (ZQK)

Friday, June 7

US Economics (Time Zone: EDT)

08:30 Nonfarm Payrolls – consensus 168K, prior 165K
08:30 Private Payrolls – consensus 175K, prior 176K
08:30 Manufacturing Payrolls – consensus 2K, prior 0K
08:30 Unemployment Rate – consensus 7.5%, prior 7.5%
08:30 Average Weekly Hours All Employees – consensus 34.5, prior 34.4
3:00 Consumer Credit – consensus $14B, prior $7.966B

Global Economics (Time Zone: GMT)

05:00 JPY Leading Index
08:30 GBP Trade Balance
10:00 EUR German Industrial Production
12:30 CAD Unemployment Rate


No major earnings

Twitter: @MichaelSedacca

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