North American News
US major indices suffer a setback after a promising start, resulting in a lower close for the day
- Snatch defeat from the jaws of victory
The major indices gave up gains into the close with all the major indices closing lower on the day.
- Dow was up 114.11 points
- S&P was up 28.29 points, and the
- she NASDAQ index was up 125.47 points.
At the close, the indices were all negative.
- Dow industrial average -187.25 points or -0.55% at 33735.00
- S&P index -12.59 points or -0.29% at 4399.01
- NASDAQ and -18.34 points or -0.13% at 13660.71
The small-cap Russell 2000 did close higher with a gain of 22.43 or up 1.22% at 1864.66.
For the trading week:
- Dow Industrial Average fell -1.36%
- S&P index fell -1.16%
- NASDAQ and the fell -0.92%
The Russell 2000 fell -1.27%.
US June non-farm payrolls +209K vs +225K expected
- June 2023 US employment data from the non-farm payrolls report
- Prior was +339K (revised to +306K)
- Two-month net revision -6K vs +93K prior
- Unemployment rate 3.6% vs 3.6% expected
- Prior unemployment rate 3.7%
- Participation rate 62.6% vs 62.6% prior
- U6 underemployment rate 6.9% vs 6.7% prior
- Average hourly earnings +0.4% m/m vs +0.3% expected
- Average hourly earnings +4.4% y/y vs +4.2% expected
- Average weekly hours 34.4 vs 34.3 expected
- Change in private payrolls +149K vs +200K expected
- Change in manufacturing payrolls +7K vs 0K expected
- Household survey +273K vs -310K prior
- Birth-death adjustment +26K vs +231K prior
The wage number at 0.4% vs 0.3% is slightly misleading as the unrounded number is 0.358% but it will still get the Fed’s attention.
Fed’s Goolsbee: I feel like we’re on the golden path to ‘no recession and low inflation
- Chicago Fed President remains optimistic on job market and inflation, eyes upcoming data for rate hike decision
- Job market is outstanding. It’s getting back to a balanced, sustained level
- I feel like we’re on the golden path to ‘no recession and the inflation target’
- The supply of housing has been limited
- There’s a lag to monetary policy
- Inflation is down somewhat but needs to come down more
- The main reason why inflation has been more persistent is that goods inflation has not come down as much as we thought. Let’s keep our eye on that over the next few months
- We can have 1-2 more rate hikes this year
- I haven’t seen anything that says one or two more hikes this year is wrong
- Services inflation is the main reason inflation overall has been more persistent
- Still undecided on July hike, highlights the importance of inflation data that’s upcoming
Canada June employment change 59.9K vs 20.0K expected
- Candidate June 2023 employment report
- Prior -17.3K
- Employment change 59.9Kversus 20.0 K estimate
- unemployment rate 5.4% versus 5.3% estimate. Last month 5.2%
- participation rate 65.7% vs 65.5% last month
- full-time 109.6K versus -32.7K last month
- part-time employment -49.8K versus 15.5K last month
- average hourly earnings YoY 4.2%
Canada June Ivey PMI 53.4 vs 53.5 prior
- Canadian manufacturing survey data
- Prior was 53.5
- Non-seasonally adjusted at vs 60.1 prior
Commodities
Gold to tread water until a clear end is in sight to US rate hike cycle – Commerzbank
- Gold price has stabilised above the $1,900 mark.
- Economists at Commerzbank analyze the precious metal outlook.
Gold price to be back at $2,000 by year’s end
Market participants appear to have come to terms with the fact that the interest rate turnaround will take some time yet.
The price will probably continue treading water in the short term but is likely to regain strength when the peak of the (US) rate hike cycle comes more clearly into view.
We expect the Gold price to be back at $2,000 by year’s end.
WTI crude futures settle at $73.86
- Up $2.06 or 2.87%
The price of WTI crude oil futures settled at $73.86.That’s up $2.06 or 2.87%. The gain equaled the gain from July 5 which is the largest gain since June 15. The low price reached $71.19. The high price was at $73.91.
EIA weekly US natural gas inventories 72 bcf vs 64 bcf expected
- Weekly US natural gas storage data
- Prior was 76 bcf
EU News
European close: European stocks rebound, FTSE MIB shines while FTSE 100 lags
- Closing changes in the main European bourses for the day and week. European bourses see mixed results with Stoxx 600 and German DAX gaining, while UK’s FTSE 100 falters
On the day:
- Stoxx 600 +0.4%
- German DAX +0.5%
- Francis CAC +0.4%
- UK’s FTSE 100 -0.4%
- Spain’s Ibex -0.4%
- Italy’s FTSE MIB +0.9%
On the week:
- Stoxx 600 -3.1%
- German DAX -3.4%
- Francis CAC -3.9%
- UK’s FTSE 100 -3.7%
- Spain’s Ibex -3.6%
- Italy’s FTSE MIB -1.7%
UK June Halifax house prices -0.1% vs 0.0% m/m prior
- Latest data released by Halifax – 7 July 2023
- Prior 0.0%; revised to -0.2%
- House prices -2.6% y/y
- Prior -1.0%; revised to -1.1%
Halifax notes that:
“These latest figures do suggest a degree of stability in the face of economic uncertainty, and the volume of mortgage applications held up well throughout June, particularly from first-time buyers. That said the housing market remains sensitive to volatility in borrowing costs. Concerns about persistent inflation have led to a significant increase in the cost of funding. Coupled with base rate rising by another 50bp, this contributed to a big jump in typical mortgage rates over the last month.
“The resulting squeeze on affordability will inevitably act as a brake on demand, as buyers consider what they can realistically afford to offer. While there’s always a lag effect when rates go up, many existing mortgage holders with variable deals or rolling off fixed rates will likely face an increase in the next year.”
Germany May industrial production -0.2% vs 0.0% m/m expected
- Latest data released by Destatis – 7 July 2023
- Prior +0.3%
France May trade balance -€8.4 billion vs -€9.7 billion prior
- Latest data released by INSEE – 7 July 2023
- Prior -€9.7 billion; revised to -€10.6 billion
Switzerland June seasonally adjusted unemployment rate 2.0% vs 2.0% expected
- Latest data released by SECO – 7 July 2023
- Prior 2.0%
ECB’s Lagarde: We still have work to do to bring inflation back down to our target
- Remarks by ECB president, Christine Lagarde, in an interview with La Provence (5 July)
- The priority is to maintain price stability
- Inflation has started to decline
- A part of that is the initial impact of monetary policy decisions
- But inflation is still higher than the 2% target, still have work to do
ECB’s de Guindos: Evolution of core inflation will be key to future policy decisions
- Further remarks by de Guindos
- What happens in September is an open question
- We need clear indications that inflation will converge to 2% target
- Services inflation is much more persistent
- We are now beginning to see impact of rate hikes on parts of the economy
- Our job is not yet done
- While underlying price pressures remain strong, most indicators have started to show some signs of softening
- Services inflation and labour costs need to be closely monitored
Other News
Timiraos: June jobs report keeps the Fed on track for July hike
- Report from the WSJ’s Fedwatcher
WSJ Fedwatcher Nick Timiraos is out with his review of the June jobs report and writes that the report “likely to leave the Federal Reserve on course to raise interest rates” but adds that the mixed numbers do little to solve internal debates at the Fed.
“Several Fed officials could push to follow a July rate increase with another hike in September. But others have called for a more patient approach,” Timiraos writes.
Yellen says US seeking healthy competition with China
- US Treasury secretary, Janet Yellen, comments in Beijing
- We’re not after a winner-take-all approach
- US, China should not allow disagreements to lead to misunderstandings that worsen bilateral ties
Chinese investors rushing offshore to make USD deposits – putting yuan under more pressure
Reuters with the info on outflows from China:
The outflows highlight deep-seated concern about the state of China’s economy as its much-awaited pandemic recovery stalls.
- Mainland Chinese holdings under a nascent scheme allowing investment in Hong Kong and Macau wealth products have more than doubled since the end of last year to 814 million yuan ($110 million).New premiums collected on Hong Kong insurance policies leapt a staggering 2,686% to $9.6 billion in the first quarter of 2023.
- Offshore demand for policies denominated in U.S. dollar’s are prevalent
BOJ likely to hold off YCC tweak in July, says ex-central bank official
- Some remarks made by former BOJ top economist, Seisaku Kameda
- BOJ likely to keep its forecasts for 2024 and 2025 roughly unchanged
- That is a sign that it is not yet convinced that 2% inflation can be achieved sustainably
- There is positive signs on inflation and wages
- But not sure if that is enough to make the BOJ turn more hawkish on policy
Cryptocurrency News
Shiba Inu holders increase a thousandfold after SHIB lead developer hints at Layer-2 Shibarium launch
- The number of SHIB holders has increased by 2,828 over the last 24 hours, CryptEye data shows.
- The surge comes after the meme coin’s lead developer hinted at a possible launch date for the L2 Shibarium.
- The announcement has revitalized buyer momentum, preventing Shiba Inu price from breaking below crucial support.
- If history is enough to go by, SHIB could rally 10% in the coming week, catalyzed by the L2 premiere excitement.
Shiba Inu (SHIB) holders have increased a thousandfold over the last 24 hours, indicating increased adoption of the meme coin. The surge comes despite the meme coin’s market value dropping in the same timeframe, crossroads that suggest an external driving force to explain the growing interest.
Shiba Inu holders up almost 3000 in 24 hours
Shiba Inu (SHIB) holders have increased by almost 3000 in the last 24 hours, an unexpected turnout considering the abysmal value of the meme coin at $0.00000731 and the fact that it has been on a downtrend.Based on data, there are up to 2,369,508 SHIB token holders as of the time of writing, signifying a 2,828 rise since the last day.
Binance CEO CZ claims the exchange is not FTX, fights FUD among BNB holders
- Binance CEO fights fear, uncertainty and doubt after news of compliance officer and key executives quitting the exchange.
- CZ claims Binance is “not FTX” despite speculation by market participants.
- BNB price hovers around $235, marking a nearly 5% decline this week.
Binance CEO Changpeng Zhao addressed the Fear, Uncertainty and Doubt (FUD) among crypto market participants after news of executives leaving the exchange became public.
According to a Reuters report, several executives are leaving the exchange, citing different reasons for leaving in their tweets.
Binance CEO dispels FUD after losing key executives
A recent Reuters report revealed that Chief Strategy Officer Patrick Hillmann, Compliance Executive Steven Christie, General Counsel Hon Ng and Chief Business Officer Yibo Ling have quit the exchange.
The executives cited their personal reasons, however, market participants speculate that the US Securities and Exchange Commission’s (SEC) crackdown on the exchange platform has resulted in the resignation of these executives.
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