The markets opened last week to a new trading with the monthly PMI numbers coming out. Manufacturing was still mixed with China's Caixin showing a contraction, but the UK Markit PMI managed to bounce back above the 50-level in May after previously slipping into contraction in April. In the US, the ISM's manufacturing gauge showed a strong print in May, rising to 51.3 and beating expectations of 50.5.
The main focus was however, the US monthly jobs report. Safe haven trades gathered steam with the Yen surging again for the most part. BoJ official, Sato last week spoke against the BoJ’s monetary policies, saying that negative rates were in fact having a tightening effect and suggested that the central bank look at tapering its stimulus purchases. The yen extended its gains on the comments and also the fact that Japan’s Prime Minister Shinzo Abe officially announced postponing the sales tax to October 2019.
On Thursday, the ADP private payrolls showed that the US businesses added 173k jobs in May, slight below consensus estimates but better than April's revised print of 166k. The monthly non-farm payrolls data released on Friday showed that the US economy added a dismal 38k jobs for the month of May. Previous month's data was also revised lower to 123k in April and 186k in March, or about 59k subtraction in total. The US unemployment rate fell to 4.70% but the participation rate dropped as well.
Last week saw the bi-annual OPEC meeting in Vienna. There was no decision made to cut or even freeze oil production leaving it to the markets to rebalance the pricing. The OPEC pointed out that Oil prices gained by nearly 80% since its last meeting in December and said that the market rebalancing was also taking shape as seen by declining crude oil stockpiles. WTI Crude Oil ended the week at $48.84 a barrel.
The ECB's policy meeting was largely a non-event with the euro staying muted, but was weaker on the whole. Policy rates were left unchanged and the ECB announced that it would begin its TLTRO-II and Corporate bond purchases this month. Inflation and GDP forecasts were lifted modestly higher.