This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
A big month-on-month increase in US wholesale inventories and a noticeable pull back in weekly unemployment claims both helped fuel the dollar rally overnight. This comes hot off the back of US JOLTS employment data, which saw the vacancy rate reach a 15-year high. Although the hiring rate saw a further pullback, and this vacancy/hiring divergence could be showing a skills mismatch between job applicants and job postings. The divergence between the vacancy rate and the hiring rate shows the uncertainty around exactly where the US economy is heading. And while the US dollar shot up overnight, the US government debt seemed unconvinced with bond yields falling across the yield curve.
US wholesale inventories are increasingly looking like they may have hit a turning point. The Atlanta Fed’s GDPNow 2Q forecast remained unchanged at 2.5%, but could be set to see a boost from inventories investment if this trend continues into the May and June data.
The divergence in the JOLTS vacancy and hiring rates quite nicely sums up the current divergence between the US dollar and government bond market.
Nonetheless, this US dollar spike has sent jitters through the commodities complex with copper, in particular, having an awful night. LME copper prices hit their February lows, as LME copper inventories look to have seen a massive influx from Chinese copper inventories. The COMEX copper price in the US lost 1.1%.