On a day when the Department of Labor’s monthly employment report once again puts the spotlight on Federal Reserve monetary policy, central bankers abroad have also been busy. In a statement this morning, the Reserve Bank of Australia left the door open for an additional rate cut in the near future, sending the Aussie dollar down sharply against major currencies. Separately, a joint statement by the People’s Bank of China and the China Banking Regulatory Commission warned that the rapidly growing banker’s acceptance market is creating fresh risks for China’s credit markets.
Pace of improvement for U.S. job market slows. In a potential signal that the trajectory of improvement in the US job market is moderating, today’s employment situation report from the Department of Labor for April included a 160,000 gain in nonfarm payrolls well below consensus forecasts and the smallest gain in seven months. The headline unemployment rate remained at 5 percent while wages improved. While the data continues to demonstrate underlying resilience, many analysts note that policy makers at the Federal Reserve are likely to note this fact as they consider the dots.
Saudi exchange to go public. Tadawul, commonly known as the Saudi Stock Exchange, issued a statement today revealing that the market operator has engaged HSBC Saudi Arabia to underwrite an initial public offering. The exchange currently has listings in excess of $400 billion, making it the largest bourse in the Middle East and Africa. Earlier this week, exchange officials announced new rules allowing increased foreign ownership of securities listed there.
British elections provide few Brexit clues. Analysts closely watched a series of local elections across Britain today for any signs of sentiment regarding an exit from the European Union. The Labour Party lost a small amount of ground in regional governments to both the ruling Conservative Party and the pro-Brexit Independence Party. Ultimately, most political strategists concluded that the elections revealed no strong evidence on the upcoming vote.
Brazil downgraded. Fitch Ratings lowered its assessment of Brazilian sovereign debt, downgrading its bonds to BB from a prior level of BB+. The announcement indicated that worsening economic activity combined with political instability drove the rating change. Separately, the traditional relay of runners carrying the Olympic torch across Brazil began this week. More than 12,000 relay runners will carry the symbolic flame between now and the commencement of the games in August.
BATS profits jump during the first quarter. In its debut financial filing as a public company, electronic exchange BATS Global Markets on Thursday announced that profits were nearly double returns during the first three months of 2015. In particular, the Lenexa, Kansas–based company saw a dramatic growth in earnings from currency-market products.
Goldman cuts staff. On Friday multiple media outlets citing unnamed sources reported that Goldman Sachs Group has initiated another round of layoffs in its trading divisions as profits for those groups remain under pressure. Fixed-income trading groups in London and New York reportedly shed up to 10 percent of staff — the second major cull for those teams year-to-date.
