| Morning Express | 06/2/23 |
Posted: June 2, 2023, 8:58 a.m.
Our daily research overs the S&P, NQ, Crude Oil, Gold, Silver, Currencies, Corn, Soybeans, Wheat, Livestock, and Softs markets.
Went out to brokerage clients before the bell
- The May Nonfarm Payroll report is due at 7:30 am CT, expectations are for:
- Job growth at 180k, up from 253k in April
- Wage growth +0.4% m/m, down from +0.5% in April, and +4.3% y/y, down from +4.4%.
- The Unemployment Rate to rise to 3.5%, from 3.4% and the Participation Rate to dip to 62.5% from 62.6%.
- Yesterday’s private ADP Payroll survey showed 278k jobs added in May. Nonfarm has been overall stronger in recent months. Does this signal a stronger NFP or a reversion to the mean?
E-mini S&P (June) / E-mini NQ (June)
S&P, yesterday’s close: Settled at 4228.00, up 37.50
NQ, yesterday’s close: Settled at 14,472.25, up 171.75
Breakout building, E-mini S&P June contract high in February was 4244.75, and pinged the highest since August overnight. However, the front-month March contract only traded to a high of 4208.50 in February. From the front-month perspective, a breakout becomes clearer above 4327.50 as price action trades into the thick of the August reversal and the 4231.50 gap, which price action must settle above on the week.
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Crude Oil (July)
Yesterday’s close: Settled at 70.10, up 2.01
Bullish tailwinds are coming from downside exasperation (detailed in prior two Morning Express reports), debt ceiling passage, U.S. Dollar weakness, and a light at the end of the tunnel with China Manufacturing PMI. There is risk over the weekend with the OPEC+ meeting; there seems to be an evolving rift between Saudi Arabia and Russia, causing some to speculate that Saudi could take an aggressive stance, raising production and forcing lower prices. Prior instances of such a move by Saudi Arabia came within a market environment where there was little hope of higher prices before a cleansing. The landscape is different now, and could quickly see $90-100 again within the right circumstance. Two bullish tailwinds for 2H are the White House having to revert from selling SPR to replenishing and renewed growth in China (have we hit peak pessimism?).
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Gold (August) / Silver (July)
Gold, yesterday’s close: Settled at 1995.5, up 13.4
Silver, yesterday’s close: Settled at 23.987, up 0.40
All about Nonfarm Payrolls and whether it supports or denies the Fed’s newfound “skip” narrative. What is the reaction across risk-assets, currencies, and rates? Gold would have an outside bullish week with a close above 2006.2.
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Silver (July)
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