Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
All eyes on US labour report: digesting Japan Household Spending, Australia Housing Finance and Philippine, Thai CPI; UK auto sales and Canada labour also due; G7 Finance Ministers meeting to discuss global corporate tax, Powell speaks at BIS Green Swan Conference
US labour data: ADP, NFIB and Consumer Confidence surveys all point to strong rebound from colossal April miss; Underemployment and Participation rates also key
US labour data: upside ‘surprise’ would ratchet up pressure on Fed if next week’s CPI sees upside surprise
EVENTS PREVIEW
The monthly US and Canada labour reports dominate the day’s schedule, with a much stronger than expected rebound in yr/yr terms in Japan’s Household Spending, Philippine and Thai CPI, Singapore Retail Sales and UK New Car Registrations to be digested ahead of the UK Construction PMI and US Factory Orders. In event terms Powell speaks at the final day of BIS’ Green Conference, while G7 Finance Ministers meet face to face for the first time since the outbreak of the pandemic, with the focs on whether agreement can be reached on US global minimum corporate tax proposal can be reached. Next week has BoC and a perhaps tense ECB meetings, the latter will also see a forecast update, while the data run has China’s trade, inflation and credit aggregates, US CPI, along with NFIB and Michigan surveys, while the UK looks to monthly GDP and the accompanying run of business activity data, German Orders, Production and Trade, while Japan awaits final Q1 GDP, Economy Watchers survey and BSI survey.
** U.S.A. – May labour market data **
– Regardless of the frequent colossal divergence over the past year between the ADP and official Private Payrolls, none more emphatic than April’s 650K vs. official 218K, the Street whisper number for Private Payrolls will be well above the median 610K, following the blo-out 978K ADP gain. While caution remains well-advised, the anecdotal evidence for a strong reading is robust, perhaps none more so than the very low level of Challenger layoffs reported yesterday and the surge in the US Consumer Confidence Labour Differential (Jobs Plentiful minus Hard To Get) to 34.6 vs. April 21.6, along with the yet another record high in the NFIB’s Unfilled Positions to 48% from 44% in April (see chart). Eminently Payrolls are anything but the be all and end all, with the Underemployment Rate (last 10.4%) and the Participation Rate seen edging up to 61.8% from 61.7%, but still way off pre-pandemic levels (see chart). Anything higher than expected, above all if the improvement is broad based, will put even greater focus on next week’s CPI with headline seen at 4.6% y/y from 4.2%, and core at 3.4% from 3.0%, and in turn put pressure on the Fed in respect of tapering if both inflation and labour market trends continue to pick up at a robust pace.
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Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
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