Market 06/05: ADP Job Growth Lowest Since January

Video: 300K Jobs Lower Than Expected - Where Does the Labor Market Go From Here?

US ISM Services PMI posts strongest increase in 9 months

• US ISM Services PMI for May up +4.4 points to 53.8 - strongest increase since early last year

  • While Manufacturing PMI dips slightly to 48.7

• ISM Business Activity Index surges 10.3 points to 61.2 - largest monthly increase since March 2021

• New Orders in ISM Manufacturing fall to 45.4 while Services new orders rise from 52.2 to 54.1

• => Gap between the two new orders components widens to 8.7 - widest since October last year.

  • This shows service demand remains high — maintaining the stickiness of services inflation.

ADP Job Growth in May unexpectedly falls to lowest since January

ADP Nonfarm Payrolls rise +152,000 in May, much lower than estimates of 175,000 and prior 188,000

• ADP Job Growth over 6 months rises from +756,000 in January to +995,000 in May

• Manufacturing companies cut -20,000 jobs, most since July

• Service companies also cut staff most in over 1 year

• Small businesses (20-49 employees) are the only segment with job cuts

• Pay growth for job switchers slows to +7.8% Y/Y

• Pay growth for job stayers holds at +5% Y/Y

Note: ADP's survey-based labor report is not the official one watched by the Fed.

=> Readers should watch BLS May jobs report this Friday!

Japan: Wage growth sustained - BOJ may taper QE next week

Japanese base wages +2.3% Y/Y in April (largest increase since 1994) => wage negotiations starting to take effect!

• … the positive wage-price spiral scenario that BOJ aims for is gradually becoming reality.

BOJ may discuss tapering bond purchases at next week's policy meeting.

USD/JPY continues to surge above 155

Crypto Market: Thailand approves first Bitcoin Spot ETF

Thailand's SEC has approved the first Bitcoin Spot ETF from One Asset Management (ONEAM) exclusively for high-net-worth and institutional investors.

The United States is regaining its position as the leading country in the cryptocurrency market.

• USD, the currency that relinquished the position of the most traded currency on the crypto market to the Korean won in Q1, has made a strong comeback and captured over 50% of global volume in early May

Other news: Bank of Canada leads G7 in cutting interest rates

1. Bank of Canada cuts interest rates -25 bps as expected, the first central bank in the G7 to ease policy

2. NBA expected to secure historic $76 billion TV deal with Amazon, NBC and ESPN

3. Claudia Sheinbaum is Mexico's first female president after surviving the bloodiest election campaign in modern history with 37 candidates assassinated

4. Boeing succeeds in first crewed spacecraft launch to orbit after multiple delays.

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