Stocks Point To A Higher Opening After May Employment Data, Rising Hopes For Eurozone And Greece

jbsU.S. sock futures are pointing to a higher opening on Wednesday morning following a decent U.S. private sector employment report from ADP in May that was mostly in line with market expectation combined with some positive news out of Europe related to the ECB’s monetary policy, recent Eurozone inflation data, and rising expectations that Athens will be able to work out a new bailout agreement with their international creditors ahead of Greece’s €300 million payment on Friday to the IMF.

Private payroll service ADP reported on Wednesday morning that the U.S. economy added 201,000 private sector jobs in May which is slightly above the 200,00o forecast from consensus estimates and higher than 169,000 in April.

“The labor market moved back up the 200,000 jobs added mark in May, a number which has been something of a bellwether for healthy employment growth” said Carlos Rodriguez, president and CEO of ADP.

“We hope that the May number is the beginning of an upward trend going into the summer months” Rodriguez added.

More labor data will be reported on Friday morning with the non-farm payroll report for May reported by the U.S. labor department.

The forecast from is for 235,000 non-farm payroll jobs added to the economy in May.

ECB Monetary Policy

As was widely expected, the ECB made no monetary policy rate changes on Wednesday and kept their main refinancing fixed rate slightly above zero at 0.05 percent.

The ECB’s overnight deposit rate is in negative territory at -0.20 percent and their marginal lending rate remains at 0.30 percent.

The ECB made no changes to its economic forecast and kept its outlook for 2015 GDP growth at 1.5 percent and 1.9 percent in 2016.

ECB President Mario Draghi said in the press conference today that inflation in the Eurozone”bottomed out” at the beginning of the year due to the ECB’s policy efforts, falling oil prices, and a weaker euro.

Draghi said that inflation rates are expected to pick up this year and in 2016 but still remain historically low.

Draghi said that there are no plans to make any changes to the ECB’s bond buying program through September 2016.

In March the ECB started its massive €1.1 trillion bond buying program to help generate economic growth.

Recent inflation data out of the Eurozone on Tuesday showed that inflation rose to 0.03 percent in May, up from 0.00 percent in April, reversing five months of stagflation, and fueling hopes of stronger growth in the 19 member Eurozone.

Core inflation which excludes energy and food prices, was up 0.09 percent from 0.06 percent in April.

Greek Prime Minister Alexis Tsipras will meet today with European Commission President Jean Claude Junker for last bailout minute talks ahead of a crucial €300 million payment that is due on Friday to the IMF.

-Johnathan Schweitzer



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