- Apple WWDC23 to begin at the top of the hourby Greg Michalowski on June 5, 2023 at 4:46 pm
The Apple WWDC23 will begin at the top of the hour. Apple is set to introduce its most groundbreaking hardware product in years at the Worldwide Developers Conference since the Apple Watch. The company is anticipated to introduce a "mixed reality" headset, merging augmented and virtual reality technologies. Apple CEO Tim Cook has long championed the potential of augmented reality to enhance communication and collaboration. However, the success of the headset is not guaranteed as past attempts by tech companies to popularize headsets have struggled to gain mass acceptance, and the market remains relatively niche. The conference will also feature a range of announcements, including software updates for devices like the iPhone and Apple Watch. The company may also hint at plans to integrate more AI across its products and services. How can you stay away? Meanwhile, in the markets: US yields are moving back toward the middle of the trading range. The US session started the day with yields higher, then reversed lower after the week and expected ISM nonmanufacturing data. The yields are now back near the middle of the ranges. 2 year yield 4.499% -0.4 basis points 5 year 3.845% +0.4 basis points 10 year yield 3.696% +0.3 basis points 30 year 3.887% +0.5 basis points In the US stock market, NASDAQ shares or higher, S&P index is higher as well but the Dow is trading down: Dow industrial average -0.18% S&P index +0.29% NASDAQ index +0.56% In other markets Crude oil is higher but off their highest levels after Saudi Arabia said that they would decrease production in the several months. Oil currently trades at $72.85. The high price reached $75.06. The low price was down $72.02 Spot gold is up $11.18 or 0.57% at $1958.50. The price is reacting to the lower dollar. Silver is trading down $0.07 at $23.54 Bitcoin is now trading at $25,795 after reaching a intraday low of $25,483. That took the price below the May low of $25,790. The next target comes at the 50% midpoint of the move up from the March low at $25,302 In the forex, the CHF is the strongest of the majors, while the GBP is the weakest. The USD is mixed. This article was written by Greg Michalowski at www.forexlive.com.
- Down day for the European major indicesby Greg Michalowski on June 5, 2023 at 3:36 pm
The major European indices are closing lower on the day. German DAX -0.54% France CAC -1.0% UK's FTSE 100 -0.12% Spain's Ibex -0.31% Italy's FTSE MIB -0.90% The declines come after 2 days of gains. This article was written by Greg Michalowski at www.forexlive.com.
- Saudi Arabia raises all July crude prices for Asiaby Adam Button on June 5, 2023 at 2:32 pm
Saudi Arabia set Arab light crude for July at +$3 to Asia, up from $2.55 previously. Oil has largely given back the post-OPEC gains in what will be a painful blow to the group. WTI crude oil was last up $0.49 to $72.17. This article was written by Adam Button at www.forexlive.com.
- US May employment trends 116.15 vs 116.18 priorby Adam Button on June 5, 2023 at 2:00 pm
Prior was 116.18 This article was written by Adam Button at www.forexlive.com.
- US April factory orders 0.4% versus 0.8% expectedby Greg Michalowski on June 5, 2023 at 2:00 pm
Prior +0.4% (was revised from 0.9% in the preliminary). Revised to +0.6% Factory orders April 0.4% vs 0.8% expected Factory orders Ex transportation -0.2% versus -0.7% last month. Durable goods orders (revised) 1.1% versus 1.1% preliminary. Last month +3.3% Durable goods ex-defense -0.7% versus -0.6% preliminary. Last month +3.2% Durable goods ex-transportation -0.3% vs -0.2% preliminary. Last month +0.3% Nondefense capital goods ex-air 1.3% vs 1.4% preliminary. Last month -0.6% Shipment Data: In April, shipments of manufactured durable goods, down for two of the last three months, fell by $2.1 billion, or 0.7%, to $277.6 billion. This aligns with the previously published decrease and follows a 0.7% increase in March. The decrease was predominantly driven by transportation equipment, which was down for three of the last four months, with a decline of $1.6 billion, or 1.8%, to $87.4 billion. Meanwhile, shipments of manufactured nondurable goods, which have been declining for five of the last six months, also decreased in April by $0.4 billion, or 0.1%, to $294.7 billion. This drop follows a substantial 1.8% decrease in March. The decrease was led by food products, which dropped for the second consecutive month, with a decrease of $0.3 billion or 0.4% to $79.8 billion. Inventory Data: In April, inventories of manufactured durable goods, which include long-lasting items like machinery, vehicles, and equipment, rose for four out of the last five months. They increased by $5.1 billion, or 1.0%, to $521.8 billion, matching the previously published increase. This rise comes after a 1.0% decrease in March. The increase was led by transportation equipment, which has seen growth three of the last four months, with a rise of $5.1 billion or 3.2% to $164.1 billion. In contrast, inventories of manufactured nondurable goods, which include items with a shorter life span, such as food, clothing, or petroleum products, declined for five out of the last six months. They decreased by $1.0 billion, or 0.3%, to $334.9 billion following a 0.7% decrease in March. The decrease was primarily due to petroleum and coal products, which fell $0.7 billion or 1.4% to $46.8 billion. Looking at the stage of fabrication, materials and supplies for durable goods increased by 0.3% in April, while nondurable goods saw a decrease of 0.6%. Work in process for durable goods increased by 2.5%, while nondurable goods decreased by 0.4%. Finished goods for durable items increased slightly by 0.1%, and for nondurable goods, they were essentially unchanged. For the full report CLICK HERE This article was written by Greg Michalowski at www.forexlive.com.
- US ISM May services index 50.3 vs 52.2 expectedby Adam Button on June 5, 2023 at 2:00 pm
Prior was 51.9 employment index 49.2 versus 50.8 prior new orders index 52.9 versus 56.1 expected prices paid index 56.2 versus 59.6 prior -- lowest since May 2020 new export orders 59.0 versus 60.9 last month imports 50.0 versus 51.3 last month backlog of orders 40.9 versus 49.7 last month inventories 58.3 versus 47.2 last month supplier deliveries 47.7 versus 48.6 last month inventory sentiment 61.0 versus 48.9 last month Bad news is good news as the market cheers a softer reading. The odds of the Fed staying on hold rose with this report to 27% from 30%. The US dollar has fallen across the board as both the headline and price metrics dip. Comments in the report: “Restaurant sales continue to track positive year over year, up an average of 8 percent past month. Employment needs have leveled off, and we are in a position to evaluate and upgrade rather than just maintain. Supply chain pressures have eased overall with some categories still hot spots. We are in a position to continue investing in technology upgrades and restaurant remodels.” [Accommodation & Food Services] “Overall slowing growth and market conditions dragging on some construction sectors.” [Construction] “As a higher-education institute, enrollment will have a major impact on our institution. Factors to consider will be the economy (state and national), as well as continued funding for education. Our enrollment is currently projected to drop 2.5 percent, which will have a negative effect on our budget.” [Educational Services] “Pent-up demand for services is driving strong revenue performance, but expenses (labor and supplies) continue to put pressure on margins, hindering the financial forecast. There is modest improvement in financial metrics, but it is becoming clear we will have to find ways to do more with less. Supply chains are stabilizing, though some segments remain choppy. The overall outlook, however, suggests the forecast is good for the next quarter. Pent-up demand for services is also causing capacity constraints, but we appear to be managing appropriately at this time.” [Health Care & Social Assistance] “Electronic components supply is strong, and lead times are nearly back to pre-pandemic.” [Information] “Economy is slowing amid increased financial banking and leasing activity. Credit standards have increased, and approvals have fallen — thus, a tight credit situation.” [Management of Companies & Support Services] “Everything seems to have leveled off: not getting any worse, not getting any better.” [Professional, Scientific & Technical Services] “Lead times are starting to shorten, due in part to greater transportation availability. Prices, in general, are continuing to increase but at a slower pace. Supply chain is becoming much more reliable.” [Public Administration] “Overall business is good, and there has not been a significant change in direction.” [Retail Trade] “Business has significantly increased, with more orders, newer customers and more activity in general. More end users are getting back to business as usual, fighting for lower prices and taking a few more days to pay. The leverage point seems to have shifted back to end users, which is healthy.” [Transportation & Warehousing] “Business conditions continue to remain elevated as CapEx (capital expenditures) spending in clean energy follows regulatory demands.” [Utilities] “Supply is plentiful, freight is moving quickly and costs are coming down. This is a 180-degree change from a year ago. Also, sales demand is down.” [Wholesale Trade] This article was written by Adam Button at www.forexlive.com.
- S&P Global final May US services PMI 54.9 vs 55.1 prelimby Adam Button on June 5, 2023 at 1:45 pm
Fourth consecutive increase Best services reading in 13 months Prelim was 55.1 Prior was 53.6 Composite PMI 54.3 vs 54.5 prelim Prior composite 53.4 Both input and output price inflation softened This is a slight downgrade and adds a small negative bias to the ISM services data at the top of the hour. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said: "The US continued to see a two-speed economy in May, with the sluggishness of the manufacturing sector contrasting with a resurgent service sector. Businesses in sectors such as travel, tourism, recreation and leisure are enjoying a mini post-pandemic boom as spending is switched from goods to services. "The survey data are indicative of GDP growing at an annualized rate of just over 2%, and an upturn in business expectations points to growth remaining robust as we head further into the summer. "However, just as demand has moved from goods to services, so have inflationary pressures. While goods price inflation has fallen dramatically in May to register only a marginal increase, prices charged for services continue to rise sharply. Although down considerably on last year's peaks, service sector inflation remains higher than any time in the survey's 10-year history prior to the pandemic, bolstered by a combination of surging demand and a lack of operating capacity, the latter in part driven by labor shortages. "However, while rejuvenated service providers will make hay in the summer season, the weakness of manufacturing raises concerns about the economy's resilience later in the year, when the headwind of higher interest rates and the increased cost of living is likely to exert a greater toll on spending." This article was written by Adam Button at www.forexlive.com.
- US equities are looking lifeless to start the weekby Adam Button on June 5, 2023 at 1:25 pm
S&P 500 futures are up 3 points, or 0.08%, to 4291 in a market that appears to be in wait-and-see mode ahead of the ISM services data at the top of the hour. The index had a strong finish last week to close at the best levels since last August. This article was written by Adam Button at www.forexlive.com.
- Saudis are fed up with OPEC members not meeting oil output goals - reportby Adam Button on June 5, 2023 at 12:52 pm
The Saudis are fed up with OPEC members not meeting output goals, according to a Bloomberg report. The Saudi Energy Minister reportedly told Al Arabiya also seeking more transparency from Russia. Those comments might be seen as a warning that if quotas and pledges aren't met, they will flood the market; or at least they won't continue with 1 mbpd cuts beyond July. From where I stand, compliance hasn't been a big issue but there may be games played with exports and production below the surface. I find it strange these stories of a rift are delivered month after month (usually in the WSJ) and they continue to work together. This article was written by Adam Button at www.forexlive.com.
- ISM services survey highlights Monday's US economic calendarby Adam Button on June 5, 2023 at 12:38 pm
The new week kicked off with a bang as OPEC+ delivered cuts through 2024 and Saudi Arabia pledged to lower production by 1m bpd in July, and maybe longer. WTI crude touched $75 only to fade back to nearly unchanged. It's up $1.82 to $73.55 now and it will be an interesting week for commodities. What's holding them back is fear of a recession and a sluggish economy in China. Today's China services PMI from Caixin was at 57.1 in an improvement from 56.4 but many are looking for some real stimulus from Beijing. In the US, the Fed is in the blackout period now and likely to skip hiking at the June meeting. The market is currently pricing a 30% chance of a hike and 70% chance of no change. That's likely to shift at 10 am ET when the ISM services report is released alongside factory orders. The ISM is the more-important release and forecast to improve to 52.2 from 51.9. Eyes will also be on the prices paid component, which was previously at 59.6. For more, see the economic calendar. This article was written by Adam Button at www.forexlive.com.
- ForexLive European FX news wrap: Dollar firms slightly, oil holds early gainsby Justin Low on June 5, 2023 at 12:00 pm
Headlines: Higher yields helping to underpin the dollar again in the new week Eurozone June Sentix investor confidence -17.0 vs -15.1 expected Eurozone May final services PMI 55.1 vs 55.9 prelim Eurozone April PPI -3.2% vs -3.1% m/m expected Germany April trade balance €18.4 billion vs €16.0 billion expected UK May final services PMI 55.2 vs 55.1 prelim Switzerland May CPI +2.2% vs +2.2% y/y expected Markets: USD leads, GBP lags on the day European equities mixed; S&P 500 futures flat US 10-year yields up 6.1 bps to 3.754% Gold down 0.3% to $1,941.37 WTI crude up 2.4% to $73.44 Bitcoin down 1.4% to $26,793 It was a decently slow session for the most part, with just a couple of economic releases to move things along in European morning trade. The dollar picked up from where it left off last week, moving higher as it is helped by the bond market once again. Treasury yields pushed higher and that is in turn helping to underpin the greenback during the session. Major currencies were initially lackluster in Asia but the dollar is now seeing slight gains on the day. EUR/USD is down 0.15% to 1.0690 while USD/JPY is up 0.2% to 140.25 at the moment. A more tentative risk mood isn't helping with commodity currencies, with the loonie also failing to enjoy the jump higher in oil prices today. In case you missed it, oil is benefiting from the OPEC+ surprise over the weekend here. USD/CAD is up 0.15% to 1.3445 and AUD/USD down 0.4% to 0.6585 on the day. The pound is the laggard, down 0.5% to 1.2380 near the lows as we look towards North America trading. There's still plenty to play for during the week as the central bank bonanza returns. The RBA will kick things off tomorrow before we get to the BOC on Wednesday. Thereafter, the focus will shift towards the Fed, ECB, and BOJ next week. This article was written by Justin Low at www.forexlive.com.
- There are signs of de-dollarisation unfolding - JP Morganby Justin Low on June 5, 2023 at 11:00 am
The firm argues that while overall dollar usage is still holding within historical estimates, the usage was more "bifurcated under the hood". While the dollar's share of traded currency volumes is just a little off record highs, at 88%, there are other evident signs of de-dollarisation elsewhere. Of note, the firm notes that the dollar's share as part of global central bank FX reserves has dropped to a record low of 58%. That number is still by far and out the largest in the world but it has been slipping, not really helped by the challenges the dollar is facing in dealing with the likes of Russia and China in particular. An interesting thing to note in that pointer is that gold now comprises 15% of reserves as compared to just 11% five years ago. Besides that, JP Morgan also highlighted a decline in the dollar's role as part of global exports - in which the US share is now down to a record low of 9%. Meanwhile, for all the talk of countries wanting to be less dependent on China, their share has actually increased to a record high of 13%. Going back to the first paragraph on traded currency volumes, the euro is the biggest loser there as its share shrunk by 8% in the last decade to a record low of 31%. The yuan is once again a winner in that category, rising to a record high of 7%. However, JP Morgan says that the progress by Beijing to internationalise the yuan has been limited and that is unlikely to change much given the China's capital controls. This article was written by Justin Low at www.forexlive.com.
- Dollar keeps in a good spot so far todayby Justin Low on June 5, 2023 at 10:48 am
Higher Treasury yields continue to play its part in underpinning the dollar today, as we continue from where we left off on Friday last week. The only difference is that equities aren't as enthusiastic but the technical picture for stocks is looking optimistic (see the charts below). Here's a snapshot of the Treasuries space at the moment: 2-year yields up 4.9 bps to 4.551% 5-year yields up 6 bps to 3.901% 10-year yields up 5.4 bps to 3.746% 30-year yields up 4.9 bps to 3.931% In turn, that is helping to keep the dollar bid this morning with EUR/USD down 0.2% to 1.0685 and USD/JPY in particular up 0.3% to 140.35 at the moment. But the moves are roughly similar to what we had at the start of the session here. Only the pound has slipped a little further alongside the antipodeans, with GBP/USD down 0.5% to 1.2385 and AUD/USD now down 0.4% to 0.6585 on the day. Elsewhere, gold tested its 100-day moving average once again and is seen holding above that - at least for now. In the equities space, the overall mood remains tentative with US futures keeping little changed in general. S&P 500 futures are flat, Nasdaq futures down 0.2%, and Dow futures up 0.1%. However, the breakout move from Friday does provide scope for optimism: The S&P 500 is looking towards testing the highs from August last year while the Nasdaq itself has broken that barrier, as tech stocks could be angling towards a stronger run to the upside on the back of the AI boom. This article was written by Justin Low at www.forexlive.com.
- Eurozone April PPI -3.2% vs -3.1% m/m expectedby Justin Low on June 5, 2023 at 9:00 am
Prior -1.6%; revised to -1.3% PPI +1.0% vs +1.4% y/y expected Prior +5.9%; revised to +5.5% Looking at the details, the large chunk of the decline on the month comes from energy (-10.1%) with a fall also observed in intermediate goods (-0.6%). That is offset by price rises in capital goods (+0.4%), durable consumer goods (+0.2%) and non-durable consumer goods (+0.3%). If you strip out energy, producer prices were only seen declining 0.1% on the month. This article was written by Justin Low at www.forexlive.com.
- UK May final services PMI 55.2 vs 55.1 prelimby Justin Low on June 5, 2023 at 8:30 am
Prior 55.9 Composite PMI 54.0 vs 53.9 prelim Prior 54.9 Little change to the initial estimates as UK services activity continues to keep more robust in May. A strong rise in output and new work is helping to underpin the expansion. S&P Global notes that: "Service sector businesses have experienced strong growth so far in the second quarter of 2023, fuelled by resilient demand for consumer and technology services, combined with a post-pandemic tailwind as households switched from spending on goods to services. Rising export sales were also reported in May, reflecting increased international visitor numbers and improving demand for business services from clients based in the US and Europe. "Job creation was maintained in May as service providers recruited additional staff in support of rising business requirements. Some firms noted a gradual improvement in candidate availability, likely reflecting a slowdown in hiring from the levels seen last year. "Intense wage pressures continued across the service economy, despite a moderation in employment growth. Higher salary payments more than offset lower fuel costs, which meant that overall input price inflation edged up to its strongest for three months in May. Average prices charged by service sector companies nonetheless increased at the second-weakest pace since August 2021 amid some reports of greater price resistance among clients." This article was written by Justin Low at www.forexlive.com.