ASIA:

China accused the United States of “suppressing” Chinese firms and issued veiled threats of retaliation on Friday after President Joe Biden expanded a blacklist of companies Americans are barred from investing in. Biden on Thursday widened a list to 59 Chinese companies that are off-limits to American investors over their links to Beijing’s “military-industrial complex,” as he maintains a campaign of pressure on the Asian superpower. White House issued a statement saying: “The sanctions target companies involved in Chinese surveillance technology used to facilitate repression or serious human rights abuses, which undermine the democratic values of the United States and our allies.”

Activity in India’s dominant services industry contracted in May for the first time in eight months as strict lockdowns to curb the second wave of COVID-19 dampened demand, prompting firms to cut jobs at the fastest pace since October, a private survey showed. The Nikkei/IHS Markit Services Purchasing Managers’ Index fell to a nine-month low of 46.4 in May from 54.0 in April, sliding below the 50-level that separates growth from contraction for the first time in eight months. Overall demand contracted at the sharpest rate since August, with foreign demand shrinking at the fastest pace since November.

The major Asian stock markets had a mixed day today:

• NIKKEI 225 decreased 116.59 points or -0.40% to 28,941.52
• Shanghai increased 7.63 points or 0.21% to 3,591.84
• Hang Seng decreased 47.93 points or -0.17% to 28,918.10
• ASX 200 increased 35.30 points or 0.49% to 7,295.40
• Kospi decreased 7.35 points or -0.23% to 3,240.08
• SENSEX decreased 132.38 points or -0.25% to 52,100.05
• Nifty50 decreased 20.10 points or -0.13% to 15,670.25

The major Asian currency markets had a mixed day today:

• AUDUSD increased 0.00762 or 0.99% to 0.77414
• NZDUSD increased 0.00529 or 0.74% to 0.72025
• USDJPY decreased 0.8 or -0.72% to 109.46
• USDCNY decreased 0.00803 or -0.13% to 6.39085

Precious Metals:

• Gold increased 21.92 USD/t oz. or 1.17% to 1,892.49
• Silver increased 0.36 USD/t. oz or 1.32% to 27.812

Some economic news from last night:

Japan:

Household Spending (MoM) (Apr) decreased from 7.2% to 0.1%

Household Spending (YoY) (Apr) increased from 6.2% to 13.0%

Australia:

Home Loans (MoM) increased from 3.3% to 4.3%

Some economic news from today:

India:

Cash Reserve Ratio increased from 3.50% to 4.00%

Interest Rate Decision remain the same at 4.00%

Reverse REPO Rate remain the same at 3.35%

Bank Loan Growth remain the same at 6.0%

Deposit Growth decreased from 9.9% to 9.7%

FX Reserves, USD increased from 592.89B to 598.17B

Singapore:

Retail Sales (YoY) (Apr) increased from 6.3% to 54.0%

Retail Sales (MoM) (Apr) decreased from 3.0% to -1.3%

EUROPE/EMEA:

The fastest monthly growth of the services sector since 1997 and a fall in the number of workers on furlough signaled that the UK’s recovery from the coronavirus crisis remained on track in May, as lockdown restrictions were relaxed across all four nations of the UK. In its monthly snapshot, IHS Markit and the Chartered Institute of Procurement and Supply (CIPS) reported the biggest surge in UK business and consumer spending in May in the services sector for the last 25 years. Employers reported the strongest rate of hiring for more than six years amid a spring boom in the economy, which follows the worst recession for more than 300 years in 2020.

The IHS Markit/CIPS purchasing managers’ index – a closely watched gauge of activity in the services sector, which is responsible for almost 80% of the UK’s national output – increased to 62.9 in May, up from 61.0 in April. Any reading above 50 denotes that the sector is expanding.

UK’s Office for the National Statistics showed the number of workers on furlough dropped to 2.1 million by mid-May, down from a peak of about 5.1 million in January during the third national lockdown. About a quarter of the arts, entertainment and recreation workforce and about a fifth of accommodation and food services workers remained on full or partial furlough, above the 8.1% average for all UK workers. According to the tax records, 3.4 million employees remained on furlough at the end of April.

The major Europe stock markets had a green day:

• CAC 40 increased 7.74 points or 0.12% to 6,515.66
• FTSE 100 increased 4.69 points or 0.07% to 7,069.04
• DAX 30 increased 60.23 points or 0.39% to 15,692.90

The major Europe currency markets had a mixed day today:

• EURUSD increased 0.00368 or 0.30% to 1.21682
• GBPUSD increased 0.00617 or 0.44% to 1.41722
• USDCHF decreased 0.00425 or -0.47% to 0.89925

Some economic news from Europe today:

Germany:

IHS Markit Construction PMI (May) decreased from 46.2 to 44.5

UK:

Construction PMI (May) increased from 61.6 to 64.2

Euro Zone:

Retail Sales (MoM) (Apr) decreased from 3.3% to -3.1%

Retail Sales (YoY) (Apr) increased from 13.1% to 23.9%

US/AMERICAS:

The Labor Department released their much-anticipated jobs report this Friday, with data signaling the US workforce is recovering albeit slower than anticipated. Nonfarm payrolls accelerated by 559,000 in May, falling short of analysts’ estimation of 671,000. The unemployment rate dropped to 5.8% from 6.1%. The employment to population ratio rose to 58%, still beneath the pre-pandemic level of 61.1%. Labor force participation fell by 53,000 to 61.6%. There are currently 8 million job openings available in the US, with businesses citing a labor shortage as former employees no longer want to work at typically lower-paying jobs.

Former Director of the National Economic Council of the United States Larry Kudlow forecast a “V-shaped” recovery for the US economy if the government stops intervening. “Let the market regulate these improvements, not the government,” Kudlow stated, pointing to the 8 million vacant positions that he believes are a result of the government providing unemployment bonus pay. Dallas Fed Kaplan voiced a similar sentiment on Thursday. As for supply chain delays, Kudlow described them as a “transition to normalcy,” while urging for less government intervention yet again. “These are not lasting problems, and I think market forces will balance supply and demand if government lets them,” he stated.

US Market Closings:

• Dow advanced 179.35 points or 0.52% to 34,756.39
• S&P 500 advanced 37.04 points or 0.88% to 4,229.89
• Nasdaq advanced 199.98 points or 1.47% to 13,814.49
• Russell 2000 advanced 7.16 points or 0.31% to 2,286.41

Canada Market Closings:

• TSX Composite advanced 87.8 points or 0.44% to 20,029.19
• TSX 60 advanced 5.82 points or 0.49% to 1,199.19

Brazil Market Closing:

• Bovespa advanced 524.34 points or 0.4% to 130.125.78

ENERGY:

The oil markets had a green day today:

• Crude Oil increased 0.47 USD/BBL or 0.68% to 69.2700
• Brent increased 0.25 USD/BBL or 0.35% to 71.5600
• Natural gas increased 0.01 USD/MMBtu or 0.20% to 3.0470
• Gasoline increased 0.00 USD/GAL or 0.13% to 2.2047
• Heating oil increased 0.01 USD/GAL or 0.43% to 2.1108

The above data was collected around 12:01 EST on Friday

• Top commodity gainers: Rubber (2.56%), Soybeans (2.07%), Canola (1.87%) and Corn (2.38%)
• Top commodity losers: Coal (-1.56%), Feeder Cattle (-0.88%), Palm Oil (-0.82%), and Lumber (-3.17%)

The above data was collected around 12:07 EST on Friday.

BONDS:

Japan 0.0850%(+0bp), US 2’s 0.15%(-0.013%), US 10’s 1.5602%(-7bps); US 30’s 2.2440%(-0.05%), Bunds -0.2140% (-3bp), France 0.154% (-2.3bp), Italy 0.8733% (-2.7bp), Turkey 18.17% (+5bp), Greece 0.8170% (+1.2bp), Portugal 0.463% (-0.6bp); Spain 0.455% (-2bp) and UK Gilts 0.792% (-5bp).