June 05, 2023

Daily Report 05/06/2023

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There were no significant domestic developments on Friday. Markets were monitoring the UK housing sector with some concerns over potential weakness and there was also a paring of long Sterling positions into the weekend. Sterling dipped lower after the US jobs data and registered further losses at the European close. CFTC data recorded a further net increase in long, non-commercial positions to just above 13,000 contracts in the latest week from below 12,000 the previous week and the largest long position since November 2021.

No Key Data

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CFTC data recorded only a small decline in the number of long Euro, non-commercial contracts to below 166,000 in the latest week, maintaining the scope for a culling of long positions. Focus this week for the single currency will be the gross domestic product figures which are released on Thursday.

Key Data

14.00 Christine Lagarde Speech

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Consolidation dominated ahead of Friday’s US jobs data. The US non-farm payrolls increased 339,000 for May compared with expectations of close to 200,000 while the April increases was revised higher to 294,000 from 253,000. Manufacturing payrolls declined 2,000 on the month and there was a small decline in the information sector while government jobs increased over 55,000 for the month. According to the household survey, the unemployment rate increased to 3.7% from 3.4% and above expectations of 3.5%. The survey reported an unchanged participation rate with a decline of over 300,000 in the number of employed. Average hourly earnings increased 0.3% on the month with the annual increase slowing slightly to 4.3% from 4.4% after a slight downward revision for April. The household survey and wages data provided an element of relief over the potential labour market and inflation pressures.

Key Data

15.00 ISM Services PMI (May) Exp. 51.5 Prev. 51.9