U.S. Indices closed positive on Friday, while Treasuries sold off in the wake of the US jobs report. Overall, it was solid as the headline topped expectations, and the Unemployment Rate remained at 4.2%, as expected, albeit with a revision lower to the headline NFP print. Nonetheless, the metrics indicated that the labour market is still healthy and helped offset some of the economic fear seen in the wake of President Trump’s tariffs. The Dollar also gained to the detriment of all G10 FX, with the Japanese Yen the laggard and also weighed on by disappointing Japanese data on Friday morning. Both the Australian Dollar and Canadian Dollar were the relative outperformers, but both still saw slight losses. Sectors were exclusively in the green with Energy, Communication Services, and Consumer Discretionary sitting atop of the pile with the former buoyed by the gains in the crude complex which was supported by the broader risk environment. Elsewhere, the Trump/Musk feud continues to bubble with no plans for a call between the two, and as the President said he is considering getting rid of his Tesla. Regarding US/China, Trump posted on Truth that Bessent, Lutnick, and Greer will be meeting with representatives of China on trade on June 9th (Monday), with talks taking place in London. Spot gold saw weakness, as all attention now turns to US CPI this week, given the Fed is on blackout ahead of their confab on June 18th. The Apple WWDC will also be eyed. Overall, the NFP was a solid jobs report. The headline of 139k beat expectations of 130k but pared from the prior, downwardly revised, 147k (initially 177k), while two-month net revisions fell further to -95k from -58k. The downward revisions and ease in the pace of job growth continue to show the labour market is slowing, but it has not yet reached the point of concern. If the prints start to fall beneath 100k, concerns will likely increase. Ahead of the data, JP Morgan warned a print of sub-100k would likely end the current bull run, and a sub-100k print would put the entire market on recession watch. The Unemployment rate was unchanged at 4.2%, albeit the labour force participation did ease, but unemployment remains beneath the Fed’s year-end projection (from March) of 4.5%, suggesting there is still room to move higher without cause for concern. Wages were hotter than forecasts and the prior, albeit with the labour market not currently a source of inflation, it has not sparked more inflationary fears, with economists more concerned about the impact of tariffs on prices. In the wake of the solid headline prints, money markets dialled back Fed rate cut expectations, with just 45bps of easing priced throughout 2025. This fully prices one rate cut, which is fully priced by October – with an 80% probability of a second rate cut. US CPI next week will help further shape Fed rate expectations. Fed speakers have been warning that inflation reports ahead may start to show the impact of tariffs to a greater extent but suggest it may take a bit longer for the impact to show up in other economic indicators. In a speech on Friday afternoon Fed Member Harker said amid uncertainty, it is still possible the Fed can cut rates later this year, but uncertainty makes it very hard to divine monetary policy outlook. The Philadelphia Fed President worries the quality of economic data is eroding, and they are increasingly flying blind when it comes to critical data. Harker later added that he sees steadiness in the ‘solid’ latest job data, and much of tariff impacts yet to be felt. Harker added Fed interest rate policy is modestly restrictive, and repeated the familiar line that now is the time for the Fed to hold steady and watch data. As a reminder, Harker is set to retire from the Philadelphia Fed at month’s end. As expected, the ECB cut rates by 25bps on Thursday and made little in the way of changes to its opening statement, which reiterated that the ECB will not pre-commit to a particular policy path. Furthermore, policy will be made via a data-dependent and meeting-by-meeting approach. Of greater interest were the accompanying macro projections, which saw the 2025 inflation forecast lowered to 2.0% from 2.3% and 2026 reduced notably below the ECB’s 2% target to 1.6% from 1.9%. From a growth perspective, forecasts were little changed with a mild downgrade to 2026 GDP. At the follow-up press conference, President Lagarde’s opening remarks carried little of interest. However, during the follow-up Q&A, Lagarde confirmed there was one dissenter to today’s decision (this will likely have been Holzmann given his opposition to a June or July cut in the run-up to the announcement). The bulk of the price action was seen after Lagarde noted that the current level of rates means the ECB is “well-positioned” to navigate the current uncertainties, suggesting that ECB could be at the end of its cutting cycle. Lagarde followed this up by noting the ECB getting towards the end of its current cycle but was not confirming a pause. Another perceived hawkish takeaway came after Lagarde appeared to downplay the 2026 inflation forecast cut, pinning it on energy effects and the recent appreciation of the EUR. Overall, the decision to cut was as expected, however, Lagarde appeared to be a bit more explicit than anticipated in guiding markets towards a potential pause. Market pricing has moved in a slightly hawkish direction with the next 25bps cut not fully priced until December (vs. October pre-release) and 26bps of loosening seen by year-end (vs. 31bps pre-release). In wake of the meeting, Bloomberg sources reported that ECB officials expect rate cuts to be paused at the July meeting, and Reuters reported a visible majority expressed preference for holding in July, but some argued for a longer pause. Elsewhere, Oil closed higher by 2% while a stronger Dollar saw Gold end Friday with a loss of 1.5%.
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For anyone following my Platinum Service it made 504 points on Friday and is now ahead by 1359 points for June, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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