LOOK AHEAD: US Macro Week Ahead: Thursday NFPs, Warsh In Sintra and Cook Ruling
Jun-26 19:49
- US macro focus turns to Thursday’s nonfarm payrolls report for June, a day earlier than usual owing to the Independence Day holiday. New Fed Chair Kevin Warsh made it clear that the Fed’s focus is on price stability and sounded less concerned about any conflict with what’s been a resilient labor market. That could limit market reaction to the NFP report although we thought the same ahead of last month’s May release only for a far stronger than expected set of payrolls figures to spark a sizeable hawkish reaction.
- Early consensus currently looks for a 113k increase in nonfarm payrolls in June after the 172k in May, albeit with a more similar pace for private payrolls at 124k after 120k.
- The unemployment rate meanwhile could hold at a rounded 4.3% for a fourth consecutive month, most recently at 4.30% in May for still close to the 4.34% averaged in 3Q25 ahead of the government shutdown that sparked some volatility.
- Higher frequency indicators such as the weekly ADP pulse and jobless claims have pointed to some softening compared to a month ago although they are still at relatively solid levels. One area that will continue to be watched is the concentration of payrolls growth –private payrolls ex health & social assistance increased 73k in May along with a three-month average of 100k although food & drinking places have been carrying this somewhat along with transportation & warehousing.
- The Fed's Warsh will also appear in a panel on Wednesday at the ECB’s Sintra Forum along with BoE's Bailey, ECB's Lagarde and the BoC's Macklem. On the evidence of last week's press conference, it didn't sound like he was an advocate of the next move being a cut to say the least. Most of the content was very much hawkish, in contrast to some expectations that he would hew to a more dovish view than the median of the FOMC even if he didn't express an outright directional view on policy. He was however highly reluctant to offer any guidance whilst also focusing on five task forces looking at various areas of potential reform.
- We again watch for any Supreme Court ruling in the Fed Governor Cook case with potential for a decision on Monday or later in the week ahead of the long weekend. SCOTUS Justices sounded skeptical of the government’s case in the January oral hearing, and prediction markets imply only a small chance (~5% on Kalshi) she will leave the Fed this year.
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OPTIONS: US Options Roundup - 27 May 2026
May-27 19:41
Wednesday's US rates/bond options flow included:
- SFRM6 96.3125/96.25 put spread bought for 0.75 in 5k
- SFRN6 96.50/96.3125 put spread bought for 16.5 in 10k
- SFRU6 96.3125/96.375/96.4375/96.625c condor, bought for 1 in 4k total (ref 96.245)
- SFRZ6 95.75p, bought for 10.5 in 10k total (ref 96.16)
- SFRZ6 96.43/96.31ps, sold at 9 in 10k total
- 5IK6 106.75 puts saw paper pay 0-03 on ~6.7K. These expire on Friday
VBYM261 110.25 calls paper paid 0-05 on 9K. These expire on Monday
US TSYS: Light Twist Flattening As Latest US-Iran Developments Mulled
May-27 19:35
Treasuries traded mixed Wednesday as the latest US-Iran developments were digested.
- After Tuesday's late gains in TY futures maintained the modest momentum overnight, volatility picked up in morning trade punctuated by Iranian media's claim of a memorandum of understanding received by Tehran that included a path to reopening the Strait of Hormuz. That triggered a lurch lower in crude prices (WTI briefly below $88/bbl) and a session high for TYs (Sept hit a 2-week high 109-28+).
- This was later dispelled after the Trump administration called the report a ‘complete fabrication', and the move partially reversed.
- But the White House continued to portray an overall optimistic view on talks, and crude ultimately held on to most losses (down over 5% for the session). Treasuries look to close with a twist flattening move, as short end /belly yields edged a little higher.
- Latest levels: the 2-Yr yield is up 0.1bps at 4.0328%, 5-Yr is up 0.6bps at 4.1774%, 10-Yr is down 0.4bps at 4.4807%, and 30-Yr is down 0.6bps at 5.012%. Sep 10-Yr futures (TY) up 1.5/32 at 109-20 (L: 109-18/ H: 109-28+; note September OI and volumes exceeded those of the June contract today).
- For a second consecutive session, a nominal coupon auction closed very close to the when-issued yield and brought little discernable market reaction; the 5Y's 0.1bp tail with middling stats (but high indirects) followed Tuesday's on-the-screws 2Y. Thursday concludes the month of auctions with 7Y Note.
- For yet another session, data was mixed. ADP weekly employment rose a solid average 35.75k in the 4 weeks to May 9, and the Richmond Fed's manufacturing survey was the strongest in years, but the non-manufacturing gauge there and in the Dallas Fed region were comparatively less impressive in the details.
- The schedule picks up slightly over the next 24 hours, with appearances by Fed's Cook and, later, Jefferson; Thursday's data schedule is packed, including the latest monthly PCE data along with GDP, durable goods, and jobless claims.
AUDUSD TECHS: Monitoring Support
May-27 19:30
- RES 4: 0.7374 Top of a bull channel drawn from the Apr 9 ‘25 low
- RES 3: 0.7325 1.500 proj of the Apr 29 - May 1 - May 5 price swing
- RES 2: 0.7223/78 High May 15 / 6 and the bull trigger
- RES 1: 0.7184 High May 18
- PRICE: 0.7138 @ 17:26 BST May 27
- SUP 1: 0.7080 Low May 19
- SUP 2: 0.7056 50.0% retracement of the Mar 30 - May 6 bull leg
- SUP 3: 0.6986 Low Apr 13
- SUP 4: 0.6899 Low Apr 7
AUDUSD is in consolidation mode. Recent weakness still appears corrective. Note that MA studies are in a bull-mode position and this set-up continues to highlight a dominant uptrend. However, support at the 50-day EMA, currently at 0.7119, has been pierced. A clear break of this average would signal scope for a deeper retracement and expose 0.7056, a Fibonacci retracement. Key resistance and the bull trigger is unchanged at 0.7278, the May 6 high.
