Jobs Friday

USD: Jun '25 is Up at 98.920.  

Energies: Jul '25 Crude is Down at 63.32.

Financials: The Sep '25 30 Year T-Bond is Higher by 6 ticks and trading at 113.20.

Indices: The Jun '25 S&P 500 emini ES contract is 80 ticks Higher and trading at 5966.00.

Gold: The Aug'25 Gold contract is trading Up at 3385.20.

Initial conclusion

This is not a correlated market.  The USD is Up and Crude is Down which is normal, and the 30 Year T-Bond is trading Higher.  The Financials should always correlate with the US dollar such that if the dollar is Higher, then the bonds should follow and vice-versa. The S&P is Higher and Crude is trading Lower which is correlated. Gold is trading Higher which is not correlated with the US dollar trading Up.  I tend to believe that Gold has an inverse relationship with the US Dollar, as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down. I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong. As traders you need to be aware of this and proceed with your eyes wide open. All of Asia traded Higher except the Nikkei exchange.  Europe is trading Mixed.

Possible challenges to traders

• Average Hourly Earnings m/m is out at 8:30 AM EST. This is Major.
• Non-Farm Employment Change is out at 8:30 AM EST.  This is Major.
• Unemployment Rate is out at 8:30 AM EST. This is Major.
• Consumer Credit m/m is out at 3 PM EST.  This is Major.

Traders, please note that we've changed the Bond instrument from the 10 Year (ZN) to the 2 Year (ZT). They work exactly the same.

We've elected to switch gears a bit and show correlation between the 2-year Treasury notes (ZT) and the S&P futures contract.  The YM contract is the Dow Jones Industrial Average, and the purpose is to show reverse correlation between the two instruments.  Remember it's likened to a seesaw, when up goes up the other should go down and vice versa.

Yesterday the ZT slide Lower at around 8:30 AM EST with Unemployment Claims pending.  The Dow climbed Higher at the same time.  Look at the charts below and you'll see a pattern for both assets. The Dow moved Higher at 8:30 AM EST and the ZT slide Lower at around the same time.  These charts represent the newest version of Bar Charts, and I've changed the timeframe to a 15-minute chart to display better.  This represented a Short opportunity on the 2-year note, as a trader you could have netted about 20 plus ticks per contract on this trade.   Each tick is worth $6.25.  Please note: the front month for ZT is now Sep '25 and the Dow is still Jun '25.  I've changed the format to filled Candlesticks (not hollow) such that it may be more apparent and visible.

Charts courtesy of barcharts

ZT -Sep 25 - 6/05/25

Dow - Jun 2025- 6/05/25

Bias

Yesterday we gave the markets a Neutral or Mixed bias, and the markets slide Lower across the board.  We gave the markets a Neutral bias which means it could go anywhere and often does.  Early in the session the indices traded Higher but by the end of the day dropped into negative territory.  Given that today is Jobs Friday, we will maintain a Neutral bias.

Could this change? Of Course.  Remember anything can happen in a volatile market.

Commentary

Today is another Jobs Friday and we have to wonder what will those numbers be?  Two days ago, the ADP Non-Farm Employment Change number was released that showed the lowest job gain in more than two years.  That doesn't bode well going forward but we will soon learn if that is the case.