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Goldman Sachs expects

• headline 125k in payroll growth for May
• jobless rate 4.2%
• wage growth 0.3% m/m

GS say federal government hiring may drag on headline numbers due to workforce cuts

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Earlier:

• May non-farm payrolls preview by the numbers: What does the data say

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The data is due at 0830 US Eastern time:

This article was written by Eamonn Sheridan at www.forexlive.com.

Adam took a look at the data tto write his NFP preview.

Check it out here:

• May non-farm payrolls preview by the numbers: What does the data say

This article was written by Eamonn Sheridan at www.forexlive.com.

Elon Musk says won’t decommission Dragon spacecraft

• SpaceX’s Dragon spacecraft serves as the company’s main vehicle for transporting both astronauts and cargo into orbit.
• Backed by multibillion-dollar contracts with NASA, SpaceX regularly carries NASA crews to and from the International Space Station. These missions are key to helping the agency sustain a continuous human presence on the ISS through its planned retirement in 2030.

This article was written by Eamonn Sheridan at www.forexlive.com.

NBC with the report citing Republican senators:

• Republicans shouldn’t back away from looking at potential changes to Medicare
• exploring ideas to slash “waste, fraud and abuse” in Medicare, several senators
• they’re open to looking at other programs, too

Sen. Kevin Cramer, R-N.D., said they shouldn’t be afraid of cutting waste in Medicare

• “Why don’t we go after that? I think we should”

More at that link.

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan finance minister Kato

• says monetary policy up to BOJ, when asked about US Treasury report on Japan

Earlier:

• US Treasury says no other country manipulates their own currency

In the report the U.S. Treasury Department urged the Bank of Japan to stay the course on monetary tightening, arguing that doing so would help correct the yen’s prolonged weakness and contribute to a more balanced trade relationship between the two countries.

In its exchange-rate report to Congress, the Treasury said the BOJ’s policy decisions should be driven by Japan’s domestic economic conditions, including growth and inflation trends. A continued tightening path, it noted, would support a healthier exchange rate and facilitate needed structural adjustments in trade flows.
The report also cautioned against using state-run investment funds—such as public pension schemes—as tools to influence the yen’s value. Instead, the Treasury emphasized that these vehicles should focus on risk-adjusted returns and portfolio diversification, not currency competitiveness.

This article was written by Eamonn Sheridan at www.forexlive.com.

Tariff negotiations between the U.S. and Japan are being complicated by the involvement of three senior American officials who hold conflicting views on trade, according to sources close to the talks. The differing approaches of Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamiesol Greer have created confusion and made it difficult for Japanese negotiators to gauge the Trump administration’s true position.

Tensions among the U.S. team have at times spilled into the open. One source said that at a recent meeting, the three cabinet members paused discussions with their Japanese counterparts to argue among themselves, further highlighting the internal discord shaping the negotiations.

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Info via Japanese media

Earlier on these talks:

• Is Japan about to do it own tariff taco? Ishiba to ease demand for US auto tariff repeal?

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan is softening its stance on the 25% U.S. auto tariff, according to the Asahi newspaper, and is no longer pushing for a full repeal. Instead, Tokyo is proposing a more flexible framework that would see tariff rates reduced depending on how much a country contributes to the U.S. auto sector.

The proposal, reportedly put forward by Japan’s chief tariff negotiator Ryosei Akazawa—currently in Washington for a fifth round of trade talks—would tie tariff relief to metrics such as the number of vehicles Japanese carmakers build in the U.S. and how many are exported from the U.S. to global markets. Akazawa is meeting with senior U.S. officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, as part of ongoing negotiations.

This shift in approach reflects Japan’s effort to strike a more pragmatic deal, aligning with broader U.S. goals of strengthening domestic manufacturing while seeking tariff relief for its automakers.

This article was written by Eamonn Sheridan at www.forexlive.com.

• Consensus estimate +130K
• Estimate range +75K to +190K
• April was +228K
• Private consensus +120K versus +167K prior
• Unemployment rate consensus estimate 4.2%
• Prior unrounded unemployment rate 4.1872% versus 4.1519% prior
• Prior participation rate 62.6%
• Prior underemployment U6 7.8%
• Avg hourly earnings y/y exp +3.7% versus +3.8% prior
• Avg hourly earnings m/m exp +0.3% versus +0.2% prior
• Avg weekly hours exp 34.3 versus 34.3 prior

Numbers released so far this month:

• ADP report +37K versus +62K prior (lowest in two years)
• ISM services employment 50.7 vs 49.0 prior
• ISM manufacturing employment 46.8 vs 46.5 prior
• Challenger job cuts 93.8K vs 105.4K prior
• Philly employment +16.5 vs +0.2 prior
• Empire employment -5.1 vs -2.6 prior
• Initial jobless claims survey week 226K vs 216K prior

I noticed that HFE — which is a firm I really respect — is at the high end of forecasts at +181K. They often spot seasonal quirks and that might be the case here.

In general, there is some modest seasonal strength in the report with it coming above estimates 54% of the time, though the downside misses have been big when they’ve missed. In terms of the unemployment rate, 44% have been lower while 40% have been higher with the remainder matching the estimate.

Overall, I don’t think this is a particularly important report given that the Fed is in ‘wait and see’ mode.

This article was written by Adam Button at www.forexlive.com.

Japan data – April household spending, a substantial miss both y/y and m/m:

-0.1% y/y

• expected +1.4%, prior +2.1%

-1.8% m/m

• expected -0.8%, prior +0.4%

Household spending is not benefitting from real wages continuing to fall in Japan. Pay is failing to keep up with inflation, which has been marked by soaring food prices:

• Japan April inflation adjusted wages -1.8% y/y, down for a fourth month

This article was written by Eamonn Sheridan at www.forexlive.com.

• The US and China should increase cooperation and trade
• The US and China should reduce misunderstandings
• Told Trump that China is implementing the Geneva agreement
• Trump is welcome to visit China again
• It’s important to dispel disruptions to China-US relations
• China and US agree to start a new round of trade talks
• Consensus has been reached, both sides should abide by it
• Both sides should make good use of established economic and trade consultation
• Both sides should respect each other’s concerns, hold equal attitude
• Two sides should strive for a win-win outcome
• US should avoid a very small number of ‘Taiwan independence separatists’ dragging China and US into a dangerous situation

This is a good sign and we’re seeing some upticks in stocks. Again, this was somewhat frontrun but there is the basis for progress here.

The ‘Trump is welcome to visit China’ is another way of saying that Xi isn’t going to the US. A few months ago there had been talk they might plan a visit in June around their birthdays on June 14-15 but that fell off the radar awhile back.

This article was written by Adam Button at www.forexlive.com.

Iran has reportedly placed large orders for ballistic missile components from China, according to sources familiar with the matter, as it works to strengthen its military capabilities while engaging in nuclear discussions with the U.S.

The shipments, which include tons of ammonium perchlorate—a key propellant for missiles—are expected to arrive in Iran in the coming months. Sources say the materials could support the production of hundreds of ballistic missiles, with some potentially diverted to allied groups in the region such as Yemen’s Houthis.

As nuclear talks with the Trump administration remain tense, Iran is simultaneously building up its regional influence and weapons stockpiles. It continues to increase its reserves of highly enriched uranium and has dismissed the idea of negotiating any constraints on its missile development program.

Wall Street Journal (gated) with the report.

This article was written by Eamonn Sheridan at www.forexlive.com.

Australian PM Albanese

• Will not loosen any rules regarding biosecurity during trade talks with United States

Albanese is fresh off a landslide election win. He won’t be chickening out.

This article was written by Eamonn Sheridan at www.forexlive.com.