Will the 'weak' US job growth continue?
Market movers today  Today's key event for markets will be the June US jobs report, where the question will be whether "weak" jobs growth continues due to temporarily higher unemployment benefits. Consensus is looking for an acceleration in payrolls growth to 700k in June. We will also keep an eye on whether wage growth is rising due to labour shortages. ECB President Lagarde is speaking in the afternoon. We expect Norway's unemployment rate to keep declining to 3.1% in June, as weekly unemployment numbers have continued to come down. OPEC+ will resume negotiations today after it failed to find a deal yesterday. The 60 second overview  Global macro: The US ISM manufacturing fell back a bit yesterday, but remains at elevated levels. This also goes for new orders. Most notably prices paid are at the highest level since 1979. While yesterday's number may spell the peak in the US manufacturing sector in line with the decline in the Chinese data, activity is still plentiful. US equity markets also took comfort in the numbers stretching higher (see below). In the Eurozone, the PMI manufacturing for June edged up slightly, which was also mirrored in the production hub of Europe, Eastern Europe, where the PMI manufacturing index for June yesterday showed an increase further to record high levels as both domestic and external demand remained strong. Equities: The second half of the year started in a buoyant setting. Equities higher, mostly led by cyclicals and value segments. Energy the best performing sector, consumer staples and real estate the laggards. VIX ticked lower for a second day and small caps rebounded. In the US, S&P was up 0.5% (gaining for the sixth straight session), Dow up 0.4%, Nasdaq 0.1% and Russell 0.8%. Risk appetite is spreading to Asia this morning, with China the only exception on tech weakness. US futures indicates similar trading, with all markets but Nasdaq set to open in green. FI: European rates were mixed yesterday with core and semi-core rates underperforming periphery in a market that lacked clear direction through the day. Buxl ASW spreads widened slightly again yesterday, continuing the move from the start of the week. Italian BTPs- German Bund spreads ended at 100.5bp, still failing to break the 100bp threshold it hadn't for almost three months. FX: Yesterday was an unusual quiet day in FX markets- especially considering that the session included an OPEC+ meeting, a Riksbank announcement and ISM manufacturing. While price action was not too surprising it did go to show that FX markets need a catalyst. Today's nonfarm payroll is the biggest near-term contender. Credit: CDS indices had a good day yesterday where iTraxx Xover tightened 2bp (to 229bp) and Main bp (to 46bp). HY bonds widened 2bp and IG was unchanged. Nordic macro  Sweden: While the Riksbank raised its growth and inflation estimates compared with the April monetary policy report, it left its repo rate forecast - now extended to Q3 2024 - at zero and the intention to use the total QE envelope of 700bn SEK by end 2021 in full. We see this as dovish with the Riksbank appearing determined to keep easy monetary policy in order to reach the 2% inflation target. However, de facto it is tapering its QE programme as purchases are coming down through 2021. Market reaction to the meeting was limited. Norway: Today, we expect Norway's unemployment rate to keep declining to 3.1% in June, as weekly unemployment numbers have continued to come down.