US rates are easing slightly - US T-Bonds are down -4 points at 4.2980% around 6 p.m. - following the publication of contrasting statistics: a flamboyant ISM for 'services' and an ADP survey validating a slowdown in activity.

The US private sector generated just 152,000 jobs last month, below economists' expectations (180,000), according to the monthly report by business services firm ADP (Automatic Data Processing).

Job gains were slower in May due to a sharp decline in manufacturing.
Leisure and hospitality also posted weaker hiring," it explains in its report.

But the scenario of an economic slowdown in the US is partly belied by the upturn in activity in the service sector (70% of GDP), which returned to growth in May (+4.4 points to 53.8 last month from 49.4), according to the latest survey of purchasing managers by the Institute for Supply Management (ISM).

In April, the US sector suffered its first contraction after 15 months of uninterrupted growth, falling back below the fateful 50-point threshold, indicating a decline in activity.

The sub-index measuring production in services rose to 61.2 from 50.9, as did employment, which stood at 47.1 after 45.9 the previous month.
The new orders index also improved, rising to 54.1 from 52.2 in April.
Eurozone Treasuries also enjoyed a fine session, celebrating in advance the ECB's rate cut - the 1st in 4 years - which 99% of them consider to be certain: Bunds and OATs eased a little further, with -3.5 basis points to 2.5030 and 2.998 basis points respectively, while Italian BTPs erased -5 basis points to 3.815%.

This morning, market participants had taken note of a number of statistics. In line with the trend observed since the beginning of the year, the HCOB composite PMI index for overall activity in the eurozone rose to 52.2 in May, up from 51.7 in April, and thus reached its highest level for a year.
In Germany, 'services' activity reached an annual zenith.

In France, on the other hand, the HCOB PMI composite index of overall activity fell for the second time since December 2023, to 48.9 in May from 50.5 in April, signalling a return to contraction after the weak growth recorded the previous month.

Finally, across the Channel, the upturn seems to have passed, and Gilts are going it alone on the downside: their yield is symmetrically tightening by +1Pt to 4.221%, but the spread is widening to 172Pts with the Bund, and is now only 7Pts with US T-Bonds (soon parity?).


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