US LABOR MARKET: MNI U.S. Payrolls Preview: A Test Of Two Cuts Eyed For 2025
- We have published and e-mailed to subscribers the MNI US Payrolls Preview.
- Please find the full report including MNI analysis and pertinent views from analysts here.
Executive Summary
- Nonfarm payrolls are seen increasing a seasonally adjusted 126k in May in the Bloomberg survey after a stronger than expected 177k in April (albeit one that was more than offset by negative revisions).
- Primary dealer analysts also see 125k whilst the Bloomberg whisper is weaker again, currently at 119k after Wednesday’s weak ADP release continued a clearly moderating trend.
- More analysts than not expect limited impact from the weather but that’s not a unanimous view.
- The industry breakdown will be watched for any weakness in trade & transportation after a strong April - likely on rapid inventory builds on tariff front-running - plus broader implications for discretionary demand.
- The unemployment rate is widely expected to round to 4.2% again after continuing to inch up to 4.19% in April. It would continue a broad plateau seen since last summer although there is mild dovish skew.
- Average hourly earnings are seen rising 0.3% M/M after a softer than expected 0.17% M/M in April, with the workweek watched after a recent recovery from January’s adverse weather lows.
- We expect greater sensitivity to a soft print in the event of a large surprise, although longer-term reaction would likely be capped by the FOMC not wanting a repeat of September’s (with hindsight) overreaction to a sharp but short-lived uplift in the u/e rate.
- A next Fed rate cut is almost fully priced for September before a second in December, both SEP meetings.
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US TSY FUTURES: Net Short Setting Seen In TY Futures On Monday
OI data points to a mix of net short setting (TY, US & WN) and long cover (FV & UXY) during Monday’s bear steepening of the Tsy curve.
- The only real positioning swing of note came via the apparent net short setting in TY futures, which titled the curve-wide positioning move in that direction.
| 05-May-25 | 02-May-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 4,072,896 | 4,071,317 | +1,579 | +58,013 |
FV | 6,910,288 | 6,913,100 | -2,812 | -120,431 |
TY | 4,960,597 | 4,931,083 | +29,514 | +1,898,593 |
UXY | 2,290,522 | 2,297,273 | -6,751 | -592,330 |
US | 1,784,206 | 1,781,930 | +2,276 | +287,243 |
WN | 1,887,381 | 1,884,433 | +2,948 | +536,669 |
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| Total | +26,754 | +2,067,756 |
BOE: Decision on Thursday moved to 12:02BST instead of midday (due to VE Day)
"In light of the national two minutes of silence to commemorate the 80th anniversary of VE day, the Monetary Policy Report and minutes of the Monetary Policy Committee meeting will be published at 12.02pm (BST) on Thursday 8 May 2025, instead of the regular time of 12pm (BST)."
OUTLOOK: Price Signal Summary - EUROSTOXX 50 Support Remains Intact
- In the equity space, the latest recovery in S&P E-Minis reinforces current bullish conditions. The contract has breached the 50-day EMA, at 5622.87. A continuation of the bull phase would expose 5837.25 next, the Mar 25 high and a bull trigger. It is still possible that the entire rally since Apr 7 is a correction. A reversal lower would signal the end of this corrective phase and expose initially, support at 5127.25, the Apr 21 low. First support lies at 5527.21, the 20-day EMA.
- EUROSTOXX 50 futures maintain a positive tone and the contract is holding on to the bulk of its latest gains. Price has recently cleared both the 20- and 50-day EMAs, and attention is on 5263.01, 76.4% of the Mar 3 - Apr 7 bear leg. It has been pierced, a clear break of it would pave the way for a climb towards 5341.00, the Mar 27 high. Initial support to watch lies at 5067.15, the 20-day EMA. Clearance of this level would signal a possible reversal.
