US JOLTS job openings rise in May

US JOLTS job openings data rose to 8.14mn in May, up from 7.92mn the previous month (downwardly revised from 8.06mn previously). This was modestly higher than the predicted 7.95mn and bucked the trend of job openings heading lower in recent months, although the uptick in new positions came largely from government jobs. The quits rate stayed steady at 2.2, the lowest since 2020, suggesting that confidence in finding a new position has fallen since the peak of the labour shortages post the pandemic. Jerome Powell was speaking at the ECB getaway at Sintra yesterday, where he said that the labour market was cooling ‘gradually.’

Eurozone CPI inflation slowed to 2.5% y/y in June, down from 2.6% the previous month. The slowdown was anticipated given the lower prints for both France and Germany released in the preceding few days. On a monthly basis, prices were 0.2% higher, unchanged from in May. However, annual core inflation came in at 2.9%, also unchanged from the May figure and missing the predicted slowdown to 2.8%, and services inflation remained high at 4.1%. Given the upside surprise in core inflation, and comments from Christine Lagarde about ‘uncertainties’ coming out of the ECB’s annual retreat in Portugal, changes of a second cut from the ECB in July after last month’s move appear remote. In other data from the single currency bloc, the unemployment rate remained steady at 6.4%, as predicted.

Egypt’s external debt has declined to USD 160.6bn at the close of Q1, down from USD 168.0 in December, a fall of around 4.4%. Egypt’s debt profile has likely improved further through the second quarter as there has been an uptick in FX inflows following the renewed multilateral and partner support pledged to Egypt since February.

Today’s Economic Data and Events

11:00 Turkey CPI inflation, % y/y, June. Forecast: 72.6%

16:15 US ADP employment change, June. Forecast: 165,000

16:30 US initial jobless claims, week ending June 29. Forecast: 235,000

Fixed Income

• The 2s 10s spread on US treasuries narrowed slightly yesterday after having widened following the presidential debate last week as expectations of a second Trump presidency rose.
• Yields on the 2yr fell 2bps to 4.7412%, while the 10yr yield fell by 3bps to 4.4316%.

FX

• The dollar lost ground against its peers yesterday as the DXY index closed down 0.2%, with only the Swiss franc selling off (down 0.1%) from the majors.
• Sterling was a notable gainer, adding 0.3% to close at 1.2685, while EUR closed up 0.1% at 1.0745.
• JPY closed all but flat at 161.44, with speculation that the Bank of Japan will wait until US markets are closed for the July 4 holiday to make an intervention.

Equities

• In the US, the S&P 500 added 0.6% to close above 5,500 for the first time yesterda. The Dow Jones closed up 0.4%, while the NASDAQ added 0.8%. In Europe, equity markets sold off after rallying on Monday. The composite STOXX 600 ended the day 0.4% lower with the CAC dropping 0.3% and the DAX 0.7%.
• Locally, the DFM added 0.2% and the ADX 0.3%.

Commodities

• Oil prices lost ground yesterday following the four consecutive daily gains through Monday. Brent futures fell 0.4% to USD 86.2/b, while WTI dropped 0.7% to USD 82.8/b, as concerns around Hurricane Beryl eased.
• Prices are picking up again in early trading this morning, bolstered by US inventory reports from the API showing that US inventories shrank by 9.2mn bbl last week. If confirmed, this would represent the largest fall in crude stockpiles in the US since January.