Market Update — Activity and liquidity both remain extremely light and as has been the case for the last ~1.5 weeks, investors have their eyes focused firmly on this Thurs (ECB) and Fri (jobs) and don’t plan on doing much until those catalysts have passed.
• Although given that the ECB has been intensely previewed since the last meeting in early May, this Thurs morning may wind up being pretty anti-climactic.
• For jobs, the trend on adds has been in the ~200K range for a while and thus it will take big movement on the wage front to really nudge markets from their present lull).
The broader macro narrative remains largely unchanged, esp. on the growth front (although sentiment towards China is quietly improving w/the NBS manufacturing PMI just the latest data point signaling “stabilization”). When it comes to inflation the disinflation trend in Europe appears to be growing more pronounced (the German inflation figures yesterday undershot forecasts by a decent margin and while talk of upside pressure in the US is growing more popular thus far signs of American inflation haven’t manifest themselves.
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