A look at the day ahead in U.S. and global markets from Mike

Dolan

Any investor trepidation about a slowing U.S. economy is once

again being offset by renewed interest rate cut hopes - seeing

the third day in row that Wall St stocks have turned around

early losses to end higher by the close.

In a week packed with employment updates, Tuesday's

hat-trick of late market rallies followed further signs of a

cooling U.S. labor market. U.S. job openings fell more than

expected in April to the lowest in more than three years, with

the ratio of vacancies to job-seekers also back at mid-2021

levels.

With one eye on Friday's May employment report, Wednesday's

release of ADP's private sector job survey is next on the slate

and a modest slowdown in job creation to 175,000 is forecast.

But already Federal Reserve rate cut speculation is back on

the boil - with 45 basis points of 2024 Fed easing back in the

futures strip and a near 80% chance of pre-election first move

priced by September.

Aided by this week's plunge in energy prices and

crude oil back at February levels, U.S. Treasury yields

ebbed further on Tuesday before steadying today as

they await the big jobs release later in the week.

Whatever the Fed does, the Bank of Canada is set to beat it

to the punch and is widely expected cut as soon as Wednesday.

With inflation back in the BoC's 1-3% target range and

following disappointing early year growth readings, money

markets have priced an 80% chance of a quarter point cut later

today and three quarters of economists polled also expect one.

Reflecting the forecasts, the Canadian dollar was

steady ahead of the decision.

More broadly, monetary easing around the world is the main

reason renewed Fed rate cut speculation has done such little

damage to the U.S. dollar.

With a European Central Bank rate cut also widely expected

on Thursday, four of the G7 economies would then be in easing

mode. And following rate cuts in Switzerland and Sweden already

this year, four central banks of the G10 most traded currencies

will likely have cut by the end of this week.

Even though the Bank of Japan is heading in the opposite

direction, the yen fell back again on Thursday. Japan's

inflation-adjusted 'real' wages fell 0.7% in April from a year

earlier - extending a record streak of 25 consecutive monthly

declines - but slowed the pace of decline as the BoJ watches

closely.

Japanese and Chinese benchmark stocks were

in the red on Wednesday - bucking a more upbeat day for other

bourses across Asia and Europe.

China markets were dragged lower by consumer and property

shares, despite an unexpected pickup in service activity in May.

China's services activity in May accelerated at the quickest

pace in 10 months, while staffing levels expanded for the first

time since January, a private sector survey showed on Wednesday.

Indian shares recovered some of Tuesday's withering

election-related losses, jumping back 3% after two key allies

pledged their support to form a new government following a

narrow win for Prime Minister Narendra Modi's alliance.

Back on Wall St, S&P500 futures were higher ahead of the

opening.

And a potential rival to the New York Stock Exchange was

gaining some attention.

A group backed by BlackRock ( BLK ) and Citadel Securities

is planning to start a new national stock exchange in Texas, a

spokesperson for Citadel Securities said on Tuesday.

The Texas Stock Exchange, which has raised about $120

million, plans to file registration documents with the

Securities and Exchange Commission later this year, The Wall

Street Journal reported.

Key diary items that may provide direction to U.S. markets later

on Wednesday:

* Bank of Canada policy decision

* US May ADP private sector jobs report, US May service sector

surveys from ISM and S&PGlobal

* US President Joe Biden visits France for 80th D-Day

anniversary

* US corporate earnings: Dollar Tree, Lululemon, Campbell Soup,

Brown-Forman

(Editing by Bernadette Baum)