Morning Briefing: Employment Report in U.S. expected at 14.30; the market expects unemployment rate to rise up to 9.20% and half a million job losses

[RTFX-Trading]

Employment Report in U.S. expected at 14.30; the market expects unemployment rate to rise up to 9.20% and half a million job losses in May.

What’s new?
United States: Budget deficit soaring with the crisis.
Central Banks: Status quo ECB, BOE and BOC.
Russia: New tensions between Russia and Ukraine on gas, Russia might cut gas to Sofia.
Euro zone: ECB expects a recession of 4.60% in 2009.
United States: Jobless claims lower at 621'000.
United States: Productivity increases more than expected by 1.60% in Q1 2009.
Euro zone: Slight recovery in retail sales in April.

Today:
09h15 Switzerland: Consumer Price index M/M May, exp 0.30%, previous 0.90%.
10h30 United Kingdom: Producer Price index "Core" M/M May, exp 0.30%, previous 0.40%.
13h00 Canada: Net change in unemployment May, exp -33'000, previous 35'900.
13h00 Canada: Unemployment rate May, exp 8.20%, previous 8.00%.
14h30 United States: Change in Non-farm Payrolls May, exp -520'000, previous -539'000.
14h30 United States: Unemployment rate May, exp 9.20%, previous 8.90%.
14h30 United States: Average hourly earnings May, exp 0.20%, previous 0.10%.
14h30 United States: Average Weekly hours in May, exp 33.20 hours, previous 33.20hours.

Overnight Rates and Indices:
EURUSD: 1.4215 – 1.4161.
USDCHF: 1.0699 – 1.0663.
GBPUSD: 1.6195 – 1.6064.
EURJPY: 137.69 – 136.84.
USDJPY: 96.90 – 96.51.
DowJones: 8'750 +0.86%.
NASDAQ: 1’850 +1.32%.
S&P 500: 942 +1.15%
Nikkei: 9’669 -0.75%.
Gold: $977

Comments:

No surprises from central banks yesterday, the ECB, the BOE and the BOC have left rates unchanged and have confirmed their plans for acquisitions of assets. The press conference by Mr. Jean-Claude Trichet gave no further indications on future monetary policy of the European Institution.
    
The market will focus on the employment report from the US this afternoon at 14.30; the unemployment rate is expected to increase to 9.20%, while half a million jobs are expected to have been cut in May. The market is anticipating bad results; the ‘risk’ is that the report is not as bad as expected, which would encourage the appetite for risk.

The budget deficit figures from the United States send shivers up the spine this morning, as it approaches 1,000 billion dollars over the first eight months of the fiscal year 2009, as informed by the Congressional Budget Office (CBO). The budget deficit reached $ 984 Billion in, compared to $ 318 Billion for the same period in 2008. According to the CBO, the budget deficit will reach $ 1'800 Billion for fiscal year 2009!

Good day, and good week-end

Emman Xuereb

RTFX Ltd
Head Office

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