US LABOR MARKET: QCEW Back And Forth On The FOMC [1/2]
Jul-31 18:17
- Nonfarm payrolls growth was exaggerated last year before unusually large downward benchmark revisions after accounting for differences in more comprehensive QCEW data. This quarterly report, for which data is currently available only to 4Q25 points to further downward revisions ahead.
- The difference is largest when it comes to private sector payrolls, in the latest vintage seen rising 1.2% Y/Y back in December. There has been little sign of moderation since, still at 1.1% Y/Y having plateaued at this level since early 2024. However, private employment in the QCEW survey sat at a softer 0.6% Y/Y.
- We’ll have a better idea of potential revision sizes with the Sept 9 QCEW release for Q1, which forms the preliminary benchmark revision ahead of the actual benchmark revision due in February for the Jan 2026 payrolls report. A word of warning here, last year saw a preliminary estimate of -818k/-819k for nonfarm/private payrolls vs the -598k/-635k in the benchmark revision.
- Much has been made of this continued potential exaggeration of the monthly payrolls data, not least on the FOMC. Governor Waller, a leading dove now and dissenter at Wednesday’s meeting, extrapolates this very early QCEW signal and suggests monthly private sector employment gains in June were closer to zero. Chair Powell meanwhile at yesterday's FOMC press conference pointed to the significant reduction in labor supply, moving in tandem with softer labor demand. See part two for their comments.
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US TSY FUTURES: BLOCK: Sep'25 2Y Sale
Jul-01 18:10
- -12,035 TUU5 103-28.5, sell through 103-28.75 post time bid at 1354:06ET, DV01 $465,000.
- The 2Y trades 103-28.38 last (-4)
EURGBP TECHS: Bullish Trend Conditions Remain Intact
Jul-01 18:00
- RES 4: 0.8694 High Apr 14
- RES 3: 0.8648 76.4% retracement of the Apr 11 - May 29 downleg
- RES 2: 0.8624 High Apr 21
- RES 1: 0.8597 High Jul 01
- PRICE: 0.8588 @ 16:18 BST Jul 1
- SUP 1: 0.8514/8482 20- and 50-day EMA values
- SUP 2: 0.8459 Low Jun 11
- SUP 3: 0.8407 Low Jun 4
- SUP 4: 0.8356 Low May 29 and the bear trigger
The trend condition in EURGBP remains bullish and Monday’s strong start to the week reinforces current conditions. Moving average studies have recently crossed and are currently in a bull-mode position - highlighting a dominant uptrend. 0.8592, 61.8% of the Apr 11 - May 29 downleg, has been pierced. Sights are on 0.8624, the Apr 21 high. Support to watch lies at 0.8482, the 50-day EMA. Clearance of this level would highlight a possible reversal.
LOOK AHEAD: Wednesday Data Calendar: June ADP Employment
Jul-01 17:50
- US Data/Speaker Calendar (prior, estimate)
- 07/02 0700 MBA Mortgage Applications (1.1%, --)
- 07/02 0730 Challenger Job Cuts YoY (47.0%, --)
- 07/02 0815 ADP Employment Change (37k, 95k)
- 07/02 1130 US Tsy $65B 17W bill auctions
- Source: Bloomberg Finance L.P. / MNI
