Generally, it seems that Wednesdays are often the slow news day of the week, but evidently, since there was no trade on Monday, that has also been pushed back by a day this week. But, of course, when the weather is the feature on the marquee, little else is needed, for now at least. The forecast for rising temperatures and scattered moisture, at best, have attracted a bullish audience this morning but will have to see if they remain for the rest of the show or become bored if the story does not move forward quickly. Weekly export sales will be released Friday morning, but I would not expect to see many positive surprises.
On the global scene, the Vice Premier of China has held a couple of video conferences with Treasury Secretary Yellen and U.S. Trade representative Tai. From the sounds of it, they were well received. He stated that China welcomed the resumption of “normal discussions.” In South American news, independent analyst Datagro bumped their estimate for Brazilian bean production slightly to 136.96 MMT and lowered their corn estimate by nearly 4 MMT to 101.65 MMT. In Argentina, ranchers are winding down their strike, which was protesting against the government’s plan to limit beef exports, just in time for grain farmers to begin their next strike.
Here in the U.S., the Weekly Initial Jobless claims slipped down abound 20,000 this week to 385,000, which is the first time we had been south of 400,000 since Mid-March last year. While encouraging, the big report everyone is waiting for. The May employment numbers will be released tomorrow morning. If you recall, the April figure of just 266,000 new jobs was quite disappointing after expectations for topping 1 million. We shall see if the data released this morning by ADP is a harbinger of good news as they reported that May payrolls increased by 978,000 positions compared with an expected 742,000.
In other economic news this morning, the Institute for Supply Management, ISM, released a series of reports for the non-manufacturing sector in May this morning, which mostly leaned to the positive side. The Composite Index came in a 64, compared with 62.7 the month prior. The Business Activity Index rose to 66.2 compared with 62.7, and new orders moved up to 63.9 from 63.2. Non-manufacturing prices jumped from 76.8 to 80.6, reminding another who may have forgotten that inflation has returned. Last but not least, the employment number for that sector was a bit of a letdown, slipping from 58.8 to 55.3.
In the macro world this morning, we have energies a bit higher, metal down sharply, financial instruments lower, equities lower, and the dollar quite strong, poking up against the highest levels reached in three weeks.