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  • richard evans

Overnight news, non-farms and sport

Good morning

A few things going ion this morning which means I’ll have to keep it to one report again. Equities are looking good although I note China shares are quite a bit lower as the celebrations of the Communist party centenary comes to an end. Perhaps it was Xi’s warning that foreign powers would face broken heads and bloodshed if they tried to suppress China. Friendly. I do like the idea that 130 countries have signed up to a minimum corporate tax rate for companies, notable exceptions are Ireland, Estonia and Hungary, all of whom are EU members and all of whom have their own lower tax rates to attract investments. I wonder if the EU will put pressure on them to come into line. Even China has signed up to this.

Main attention today in on US employment numbers, headline expected around +700k but I have seen some looking for something well over 850k. Seen some interest in overnight downside EURUSD and GBPUSD options, just to counter any further dollar gains. The 1.3725 GBPUSD put costs 25 usd pips ($2,500 per GBP1mio) while 20 pips buys the 1.1800 EURUSD put ($2,500 per EUR1mio). Monday is actually a holiday in the US so I’d be inclined to push those out by a further day for a couple of extra pips.

Euro quarter finals begin today with Switzerland taking on Spain and Belgium against Italy. Could be a couple of crackers. England play Ukraine tomorrow after Czech Republic play Denmark. England are yet to concede a goal, lets hope that continues, but I also hope we don’t approach it too defensively. Still, a win is the important thing, regardless of how it comes about.

F1, cricket and rugby also likely to keep us busy, pretty useful given the weather forecast for the weekend. Yes it may be good for the garden but I’d swap my lush green grass for some higher temperatures right now.

- US markets higher yesterday, dollar remains firm

- Better US data responsible for latest leg higher

- US initial jobless claims lowest since pandemic began

- Manufacturing ISM over 60

- IMF raises US2021 growth forecast to 7%

- IMF says US likely to raise rates late 2022

- Feds Harker would like to taper asset purchases later this year

- But still currently sees no rate rise until 2023

- Nonfarm payrolls the key event today, headline expected around +700k

- 130 countries agree minimum corporate tax rate

- GBP softer after BoEs Bailey sounded dovish

- New DUP leader seeks end to NI protocol

- Sees it as punishment for UK leaving EU

- ECBs Weidmann says ECB should not tolerate high inflation

- Says ECB should aim for price stability regardless of financial situation

- UK PM Johnson to meet Merkel today

- Germany could ease restrictions on UK travellers

- But UK Covid cases continue to climb

- Nearly 28,000 new cases reported yesterday, highest since late Jan

- Nikkei up 0.27% to 28,783

- Shanghai Comp down 1.95% to 3,518

- USDCNY fixes 6.4712 from 6.4709

- 10.00 EU PPI

- 13.30 US nonfarm payrolls

- 13.30 ECBs Lagarde speaks

- 13.30 CAD trade balance

- 14.45 US NY ISM

- 20.30 CFTC position data

- Monday

- 02.45 AU retail sales

- 02.45 China caixin services PMI

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