NEWSQUAWK PREVIEW: US Nonfarm Payrolls (June 2021) will be released at 13:30BST/08:30EDT on July 2nd

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SUMMARY: Labour market gauges going into Nonfarm Payrolls have been predominantly strong in June, but not all; ADP’s report was strong, but some desks had been hoping for an even greater rise, while Challenger layoffs was an exceedingly solid print at the lowest figure since June 2000 with the report crediting record job openings and high job seeker confidence. Consumer Confidence continues to facilitate the potentially impressive NFP print, as it rose to the highest post-pandemic level, while the difference between jobs "plentiful" and jobs "hard to get" rose too. However, the jobless claims figure was poor and surprisingly rose, which may weigh, but the total number on unemployment benefits fell below 15mln for the first time since April ’20. Moreover, business surveys, such as the ISM Manufacturing survey, painted a reasonably poorer picture with the headline figure falling alongside the employment sub-component dipping into contractionary territory, where panellists noted it remains difficult to fill vacant positions. Some of the former factors point to improving conditions and growing confidence amid the re-opening picture. However, slack still remains in the economy illustrated by the participation and unemployment rate still way off pre-COVID levels and record job openings. On this, and whilst the Fed continues to state unemployment has a long way to go, it is not unanimous. For instance, Quarles does not think we need to see labour force participation return to pre-COVID levels due to baby boomer retirements, although several members have said they are looking to return to the pre-COVID employment landscape. Therefore, a decent print here is only likely to amplify the hawkish calls at the Fed amid progress on "substantial further progress", sustaining expectations for a tapering announcement into year-end.

02 Jul 2021 - 12:10- Research Sheet- Source: Newsquawk