CANADA DATA: Dour PMIs In June; Firmly Contractionary With Rising Inflation
Jul-04 14:19
The S&P Global Canada services PMI for June remained “deep inside contraction territory” whilst operating costs increased by their fastest since Oct 2022 and selling prices were increased at the fastest pace in just over a year.
- Services PMI: 44.3 in June after 45.6 in May, off 41.1 in March and 41.5 in April but still particularly depressed.
- Composite PMI: 44.0 in June after 45.5 in May.
- Services PMI highlights (full press release here):
- “Canada’s services sector endured a challenging month in June, with activity and new business both continuing to decline amid widespread market uncertainty.
- Confidence in the outlook also remained subdued, although firms added to their staffing levels modestly. This helped them to comfortably keep on top of overall workloads.
- Meanwhile, prices data showed stronger inflationary pressures. Input costs rose to the greatest degree since October 2022, driven by tariffs, higher supplier prices and increased staffing expenses.
- In response, service providers increased their own prices at the fastest pace in just over a year.”
- The composite PMI clearly didn’t fare any better. New business volumes continued to decline noticeably but if there was any consolation it was by the softest degree since January. Selling prices rose to the greatest degree since Apr 2024.
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US TSY FUTURES: BLOCK: Sep'25 5Y Buy
Jun-04 14:17
- +5,000 FVU5 108-11, buy through 108-10.5 post time offer at 1008:12ET, DV01 $323,500.
- The 5Y contract trades 108-10 last (+11).
US TSYS: Post-ISM Services Data React, Through Resistance
Jun-04 14:09
- Treasury futures extended highs, drawing some sell interest after mixed ISM Services data (index & new orders lower than expected, prices paid and employ higher).
- Tsy Sep'25 10Y futures currently trades +17.5 at 111-00 (111-01 high) through resistance at 110-30 (High May 30 and high Jun 2). Next resistance at 111-05.5 (High May 9).
- Curves mixed now, off early lows: 2s10s -0.729 at 49.126, 5s30s +0.386 at 96.231
- Cross asset: Stocks pare gains (SPX eminis steady at 5981.5), Gold bouncing to 3363.45, Bbg US$ index extending lows 1208.96 (-5.0).
US: Lutnick To Deliver Testimony To Senate Appropriations Committee Shortly
Jun-04 14:02
US Commerce Secretary Howard Lutnick is shortly due to deliver testimony to the Senate Appropriations Committee on President Donald Trump's FY26 budget request for the Department of Commerce. LIVESTREAM
- The testimony comes after Trump signed a proclamation yesterday raising the tariff on steel and aluminium imports from 25% to 50%, effective as of 00:01 ET 05:01 BST this morning (Wednesday, June 4).
- The proclamation said: “Although the previously imposed steel and aluminum tariffs have helped provide critical price support … they have not yet enabled these industries to develop and maintain capacity [required for] national defense needs.”
- Republicans and Democrats alike on the Appropriations panel are likely to grill Lutnick on the status of the ‘90 trade deals in 90 days’ that Trade Counsellor Peter Navarro promised shortly after Trump agreed to pause his ‘reciprocal tariffs’ on April 9.
- At 14:00 ET 19:00 BST, OMB Director Russell Vought will testify on Trump’s FY26 budget request for the OMB before the House Appropriations Committee. Expect fireworks from Democrats on the panel, who view Vought as the primary driver behind Trump’s plans to dismantle the federal bureaucracy.
