Thursday Morning Cheat Sheet: 3 Stories Moving Markets

Markets declined in Asia on Thursday. Japan’s Nikkei fell 0.85 percent after a volatile trading session, ending below 13,000 for the first time in two months. In Hong Kong, the Hang Seng declined 1.05 percent while the S&P/ASX 200 fell 1.12 percent. Markets sensitive to the Japanese economy — particularly the Nikkei — are still adjusting to the aggressive economic turnaround plan put in place by Prime Minister Shinzo Abe.

Markets advanced in Europe in mid-day trading following news that the ECB and the BoE will keep benchmark rates unchanged. Germany’s DAX was up 0.35 percent, London’s FTSE 100 was up 0.20 percent, and the STOXX 50 index was up 0.65 percent.

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U.S. futures at 8:40 a.m.: DJIA: +0.20%, S&P 500: +0.35%, NASDAQ: +0.26%.

Here are three stories to keep an eye on:

1) U.S. Labor Market Reports: Announced layoffs declined in May to 36,398, the lowest level of the year and the third consecutive decline, according to outplacement consultancy Challenger, Gray & Christmas. This is a 4.5 percent sequential decline and 41 percent fewer layoffs than the year-ago period. This year to date, employers have announced 219,560 job cuts, down 11 percent from the same period last year.

The U.S. Department of Labor reported that initial jobless claims for the week ended June 1 declined 11,000 to 346,000. The four-week moving average increased 4,500 to 352,500. The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending May 25, unchanged from the prior week’s unrevised rate.

2) European Policymakers Keep Their Foot on the Gas: Policymakers at both the European Central Bank and the Bank of England decided to keep benchmark interest rates unchanged and asset purchase levels untouched. In England, the Monetary Policy Committee voted to maintain the Official Bank Rate paid on commercial bank reserves at 0.5 percent, and to keep the size of its asset-purchase program at 375 billion pounds ($579.49 billion). In March, the MPC voted to reduce the Bank Rate by 0.5 percentage points to its current level, and increase the size of the asset-purchase program by 50 billion pounds to its current total. Minutes from the meeting will be released on June 19.

The Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.50 percent, 1.00 percent, and 0.00 percent, respectively.

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3) Unemployment in France Edges Higher: The International Labor Organization reported that the headline unemployment rate in France increased 0.3 percent in the first quarter to 10.4 percent, a 15-year high.

At the end of May, Eurostat reported that unemployment in France edged up to 11.0 percent, the same as the average across the EU27. Meanwhile, seasonally-adjusted unemployment in the EA17 hit a record high of 12.2 percent.

Eurozone Unemployment

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