US: Voters Response To OBBB Sets Up Challenging Midterm Elections For GOP

The full NFIB small business report for May is published Tuesday morning (0600ET), but the jobs portion was released last week and it signaled loosening labor market conditions.

• Most notably, a net 26% reported raising compensation in May, down 7pp for the biggest decline since April 2020 and the lowest % since February 2021. This series has historically been correlated with overall wage growth (see chart vs the Atlanta Fed Wage Tracker).
• Plans to increase compensation ticked up 3pp to 20% but this around levels seen in 2018-20 pre-Covid and well below 30+% in 2021-22.
• "Job openings were the highest in the construction, transportation, and manufacturing industries, and the lowest in the wholesale and professional services industries. Job openings in construction were down 9 points from last month, and down 6 points from May 2024." Just 18% of professional services firms reported job openings - vs 47% in a year earlier.
• Just 12% net plan to create new jobs in the next 3 months, down 1pp and at the weakest levels in 8 years outside the pandemic.
• The % reporting labor quality as their "biggest problem" fell 3pp to 16%, the lowest outside the pandemic since 2017.
• 34% reported job openings they could not fill - equal to April ("the last time job openings were below 34% as in January 2021")

• RES 4: 0.8557 High Apr 28  
• RES 3: 0.8541 High May 2 
• RES 2: 0.8493 High May 9  
• RES 1: 0.8440/59 50-day EMA and key resistance / High May 21 
• PRICE: 0.8421 @ 15:56 BST Jun 9 
• SUP 1: 0.8356 Low May 29 and the bear trigger 
• SUP 2: 0.8327 1.382 proj of the Apr 11 - 16 - 21 price swing
• SUP 3: 0.8316 Low Mar 28 and a key support
• SUP 4: 0.8277 1.618 proj of the Apr 11 - 16 - 21 price swing

EURGBP is unchanged and a bear cycle remains in play. A key short-term resistance to watch is 0.8440, the 50-day EMA. It has been pierced, however, a clear break of it is required to highlight a stronger reversal. This would expose 0.8541. For bears, support to watch lies at 0.8356, the May 29 low. Clearance of this level would resume the downtrend and open 0.8316, the Mar 28 low and a key support. 

• RES 4: 1.3800 Round number resistance 
• RES 3: 1.3757 1.618 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 2: 1.3681 1.500 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 1: 1.3616 High Jun 5    
• PRICE: 1.3546 @ 15:55 BST Jun 9
• SUP 1: 1.3453 20-day EMA
• SUP 2: 1.3335/3288 Low May 20 / 50-day EMA
• SUP 3: 1.3140 Low May 12 and key support
• SUP 4: 1.3041 Low Apr 14

Trend signals in GBPUSD are unchanged and remain bullish. Last week’s  fresh cycle high, confirms a resumption of the uptrend and an extension of the price sequence of higher highs and higher lows. This opens 1.3681 next, a Fibonacci projection. Initial support to watch lies at 1.3453, the 20-day EMA. A clear break of this average would suggest potential for a deeper correction and expose the 50-day EMA, at 1.3288.