Good morning and Happy Jobs Day! Here's what you need to know.
It's Jobs Day! At 8:30 a.m. the BLS will release its employment situation report. Consensus is for 215,000, down from 288,000 in April. The employment rate is expected to tick up 10 bps to 6.4%.
Goldman's Payrolls Forecast. Goldman's prediction is even lower, at 210,000. "Payroll gains have averaged 238k over the last three months, but the May employment data flow looks more mixed," the firm's David Mercie writes. "As a result, we expect May to come in a bit below the trend-like rate of about 225k that we expect as growth accelerates in 2014."
Barclays Unemployment Rate Forecast. Barclays sees the unemployment rate holding firm. "We look for the unemployment rate to stay unchanged at 6.3% in May," the firm said in a note. "Although there may be some increase in the labor force participation rate after last month’s 0.4pp drop, we expect the solid pace of job growth to absorb re-entrants and leave the unemployment rate unchanged."
New Largest Lehman-Era Fine. The Wall Street Journal reports the government will settle with Bank of America over alleged Lehman-era mortgage fraud for more than $12 billion, topping the previous record settlement held by JP Morgan.
Record-Low Eurozone Yields. The ECB's decision to tip interest rates on deposits into negative territory has sparked a fresh surge into continental treasury notes, the FT says. "Italy and Spain's 10-year bond yields fell about 13 basis points each to 2.8% and 2.68% respectively, new record lows. Greece's benchmark bond yield fell 25 bp to 5.86%, below the 6 per cent mark for the first time in a month. Portugal and Ireland's 10-year yields also fell 10 bp to 3.51% and 2.48% respectively, a new record low in Dublin's case."
UBS: Draghi's Weak Sauce. The ECB chief Mario Draghi's negative rates decision was as expected as it was unprecedented, and UBS rate strategies chief Justin Knight is not impressed, arguing it failed to amount to another "whatever it takes moment" like the one Mario Draghi conjured in 2012, the FT reports. "Notably, after an initial sell-off, the euro recovered late in European trading against the dollar," Knight writes. "The ECB's policy decisions will have only modest impacts on interest differentials and relative central bank balance sheet size. To the extent the euro weakens against the dollar this year—as we expect—depreciation is more likely to be driven by improving US growth and rising US interest rates."
Walmart Investor Day. Shareholders convene in Bentonville Friday. On the docket: " appointing an independent board chairman, and a say-on-pay measure designed to curb executive compensation," USA Today reports.
Jos. A. Bank Earnings. Analysts are expecting $0.40 share and revenue of $216 million.
Consumer Credit. At 3 p.m. we get consumer credit data from the Fed. Consensus is for $15 billion, down from $17.5 billion prior.
Markets. U.S. futures and European stocks were higher. Equities in Asia closed down. The U.S. 10-year note was at 2.50%.
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