Morning Bid: New records as jobs scanned, Tesla jumps

(Reuters) - A look at the day ahead in U.S. and global markets from Mike Dolan

Federal Reserve chair Jerome Powell managed to smooth some election-ruffled feathers in bond markets on Tuesday, helping Wall St stocks back to all-time highs as a sweep of labor market soundings are due ahead of the July 4 break.

As the Nasdaq hit new records and the S&P 500 closed above 5,500 points for the first time, Tesla stole the show - surging 10% to its highest level since January after it reported a smaller-than-expected 5% drop in vehicle deliveries in the second quarter.

The auto giant's shares, the only stock of so-called "Magnificent 7" of U.S. megacaps to be still in the red for the year, was up a further 3% ahead of Wednesday's bell.

U.S. Treasuries, which had been hit earlier this week by rising bets on Donald Trump's return to the White House and the fiscal implications of his campaign promises, have calmed somewhat since Powell spoke in Portugal on Tuesday.

Ten-year yields have slipped back to 4.43% from peaks close to 4.5% set on Monday - when betting markets pushed former President Trump's chances of beating incumbent Joe Biden in November to more than 60% after Biden's dire TV debate performance last week.

Still inverted U.S. Treasury yield curves had steepened into the new week as a result, with the New York Fed's estimate of the 10-year term premium demanded by investors to hold longer-term government debt flipping back positive for only the third time this year.

Although still signalling no rush to cut interest rates, Powell offered markets some encouraging noises by saying the United States is back on a "disinflationary path."

Part of his discussion was how the Fed needs to keep a balance between sustaining the economy and bearing down on inflation - salient in a week seeing further signs of cooling growth and with critical labor market readouts.

An unexpected jump in U.S. May job openings, however, went slightly off script - although it's a month older than most of this week's employment reports.

Wednesday sees ADP's private sector jobs data for June, weekly jobless claims and June layoffs data - alongside service sector surveys for last month too.

And that all precedes the release of minutes from the last Fed policy meeting.

The deluge of data comes as trading is expected to thin ahead of Thursday's holiday.

Wall Street futures were steady ahead of the open and the dollar index was slightly easier - especially against the euro and sterling as British and French elections play out over the remainder of the week.

With tactical voting and positioning in the second round of France's assembly elections on Sunday now set to prevent an overall majority for the far right, French government debt premia over Germany fell back below 70 basis points for the first time since mid June.

In Asia, however, the story was different - with the dollar hitting new 38-year highs just under 162 Japanese yen - with no intervention from the Japanese authorities yet - and 2024 highs against China's yuan.

The latter was hit by surprisingly weak June service sector survey, which also hit mainland Chinese stocks - now up less than 1% for the year.

Key developments that should provide more direction to U.S. markets later on Tuesday:

* US June ADP private sector jobs report, weekly jobless claims, June Challenger layoffs, ISM and S&P Global June service sector survey, May factory goods orders, May international trade balance; Canada May trade balance

* Federal Reserve issues minutes of latest policy meeting; New York Federal Reserve President John Williams, European Central Bank President Christine Lagarde and ECB chief economist Philip Lane speak at ECB's annual forum in Sintra, Portugal

* US corporate earnings: Constellation Brands

* US Treasury 4-week bill auction

(By Mike Dolan, editing by XXXX mike.dolan@thomsonreuters.com)