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v US
ADP reports 173,000 private-sector jobs added in May
v US
initial jobless claims fall to five-week low
v ECB
keeps interest rates unchanged with neutral changes to forecasts
v OPEC
fails to reach agreement on oil production levels
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OVERNIGHT MARKET UPDATE:
· US – ADP reported that the
private-sector employment gains accelerated in May as employers added 173,000
jobs, compared to the upwardly revised 166,000 in April. Service-sector firms
continued to propel job growth in May, upping hiring slightly from April and
offsetting another decline in factory head counts.
· US – The initial jobless
claims fell by 1,000 to a seasonally adjusted 267,000, the lowest level in
five weeks. The average of new claims over the past month slipped by 1,750.
· Euro area – The ECB held all
rates. The 2016 GDP forecast was increased to 1.6% from 1.4% previously, 2017
was unchanged, and 2018 saw growth trimmed 0.1 ppt to 1.7%. On inflation,
2016 was lifted to 0.2% from 0.1%, while 2017 and 2018 were unchanged. The start
date for purchases of corporate bonds will be 8 June.
· Currencies – The euro
weakened against the US dollar as ECB’s updated projections showed annual
inflation remaining well below the Bank’s 2% target in the coming years are
suggesting further stimulus. Elsewhere, strong employment data in US also
helped to support the US dollar against commodity-linked currencies. However,
the Japanese yen strengthened after Takehiro Sato, a member of BoJ’s
policy-setting board, said BoJ should go more slowly in trying to achieve its
2% inflation target.
· Equities – US stocks closed
modestly higher as oil prices reversed course to settle higher after a weekly
report showed a decline in US crude inventories. The S&P500 rose by 0.3%
to close at the highest level since 3rd November 2015.
· Rates – US Treasury yields
declined as demand for relatively safe assets rose following the failure by
the OPEC to reach an agreement on production.
· Energy – Crude oil prices
finish higher as support from weekly declines in US crude supplies and output
offsets earlier pressure from the OPEC’s failure to reach a pact to cap
member production.
· Precious Metals – Gold
prices closed lower as stronger US employment data suggesting a higher chance
of Fed rates hike in this coming summer. Higher US dollar also dampened the
appeal of the yellow metal.
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INDICATIVE
MAJOR CURRENCIES
Source: Bloomberg, AmBank
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Friday, June 3, 2016
Daily FX Update, 03 June 2016
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