US non-farm payrolls once again demonstrated their ability to move markets.
The headline payrolls number came in at +559k (May) below the consensus expectations of +650k. That drove a sharp shift lower in US 10 year bond yields (down 7bps) and a reversal of some of the prior day’s dollar strength, and created, therefore, the perfect set-up for tech outperformance. With that, though, the S&P500 is only back at the top end of its range of the past two months. Furthermore signs of complacency in this market are multiple, as we discuss in the video.
Key events this week include the ECB monetary policy meeting on Thursday, followed by a press conference with ECB President Lagarde. In the US the consumer price inflation data (also Thursday) will be a key focus.
The market is forecasting a headline rate of 4.7 per cent (Y-o-Y) and core inflation of 3.4 per cent. Key Chinese monthly total social financing/lending data is also released this week. In the UK house price data is published this week (Monday & Thursday) as well as trade data and industrial production.