Employment Dominates Financials Price Direction

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U.S. stock index futures were higher in the overnight trade with the S&P 500 and NASDAQ futures advancing to record highs. Futures are being supported by continued fiscal and monetary support.

The headline nonfarm payrolls number and private payrolls were stronger than expected. However, the data that follow was on the weaker side.

Nonfarm payrolls in June increased 850,000 when a gain of 703,000 was expected.

Private payrolls were up 662,000, which compares to the anticipated increase of 600,000.

Manufacturing payrolls increased 15,000 when up 23,000 was predicted.

The unemployment rate was 5.9% when 5.6% was estimated.

Hourly earnings were up 0.3% when up 0.4% was expected.

The labor participation rate was 61.6% when 61.7% was anticipated.

The average workweek was 34.7 hours when 34.9 hours were predicted.

The 9:00 central time June factory orders report is expected to show a 1.5% increase.


The U.S. dollar index hit a three-month high in the overnight trade. However, prices declined when the U.S. employment numbers were released, which were on balance weaker than expected.

Producer prices in the euro area increased 1.3% from a month earlier in May 2021, which is the twelfth consecutive month of increase and above market expectations of 1.2%.


Federal Reserve Bank of Philadelphia President Patrick Harker said Thursday that while an interest rate hike lies some ways in the future, he is ready for the U.S. central bank to begin slowing the pace of its asset buying this year.

Mr. Harker said, “I am in the camp of starting the tapering process,” referring to slowing the pace of the Fed’s $120 billion a month in bond purchases.

The U.S. Treasury yield curve has flattened recently with shorter-dated yields increasing to reflect higher rate expectations, while longer-dated yields fell because higher interest rates in the near term would likely mean a slower rate of growth in the future.

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