BMO’s Markets Wrap – InvestorsObserver
Bank of Montreal in its morning note of this Friday noted equity market futures pointed to a firm open this morning ahead of an all-important U.S. payrolls report, after the S&P 500 pushed to yet another record high yesterday. Treasury yields were little changed, with the 10-year yield sitting at 1.30%, or right where it started the week. Oil prices were holding above US$70 after rallying since mid-week alongside a steady OPEC, disrupted U.S. gulf production and a drop in U.S. inventories. That has given some lift to the loonie, which traded at $1.253/USD (79.8 US cents) this morning.
The U.S. employment report for August will be the key release at 8:30 am. BMO said noonfarm payrolls are expected to rise by 750,000 in the month, “a still-strong pace, but backing off somewhat from gains in excess of 900k in the prior two months.”
In Canada, BMO added, labour productivity estimates for Q2 (also at 8:30 am ET) will add some more detail on “that lousy” second quarter.
BMO noted global equity markets were treading water as they focus on the big event of the day: the U.S. payroll report. Asia finished the day on a mixed note: the Hang Seng was down 0.7% and the CSI 300 closed 0.5% lower, while the Nikkei added over 2%. European bourses were also mixed during mid-day trade: the CAC 40 and the IBEX 35 were down 0.4%, the FTSE MIB was flat, and the FTSE 100 and the DAX were slightly higher.
The USD index was “very choppy” this morning and was weaker, with most of the majors higher versus the greenback. The JPY was mostly flat at (Yen)109.9 “as the winds of political change blow.” PM Suga, humbled by his inability to crush the coronavirus, announced he would be stepping down as leader (a role he has held for a year) and will not run at the next election (which must be held before the end of November). “If every leader around the world was held to that standard, they would all be resigning!,” BMO said.