By Han Tan Market Analyst, ForexTime
US stock futures are little changed at the onset of the new trading week while Asian equities are a mixed bag at the time of writing. US stocks saw a boost from this past Friday’s lower-than-expected US nonfarm payrolls data, pushing the S&P 500 the within 0.06% of its record high from 7 May.
‘Markets Extra’ Podcast: Jobs, jobs, jobs! Why the US nonfarm payrolls are such a big deal
Markets appeared primarily to have latched on to the headline NFP figure of 559,000, which was below the forecasted figure of 675,000.
That jobs report alleviated some of the concerns that the Fed may have to move up its timeline for its eventual tapering of its asset purchases.
Free Reports:
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Sign Up for Our Stock Market Newsletter – Get updated on News, Charts & Rankings of Public Companies when you join our Stocks Newsletter
That slight respite in the ongoing inflation debate allowed the Nasdaq 100 to claim its biggest single-day gain in two weeks, while the Dollar unwound much of its pre-NFP gains.
Still, there were signs of underlying cost pressures from Friday’s jobs report.
The average hourly earnings of American workers climb by more than expected in May, while the unemployment rate also fell to 5.8% last month, compared to April’s 6.1%.
Although markets were able to ignore such inflation cues for now, focusing instead on the fact that some 7.6 million Americans remain out of work compared to pre-pandemic levels, it does not mean that the inflation debate has disappeared from market chatter.
In fact, this coming Thursday’s US consumer price index announcement could set tongues wagging once more, amidst all the other potential market-moving events lined up over the coming days:
Monday, June 7
- Germany factory orders
Tuesday, June 8
- Eurozone Q1 GDP (final)
- Germany industrial production
- Japan Q1 GDP (final), trade balance
Wednesday, June 9
- Bank of Canada rate decision
- EIA crude oil inventories
- China CPI, PPI
Thursday, June 10
- European Central Bank rate decision
- US-Iran nuclear talks resume
- OPEC’s monthly Oil Market Report
- US inflation, initial jobless claims
Friday, June 11
- G7 summit begins
- UK industrial production
- US consumer sentiment
Considering all the inflation markers due mid-week out of the world’s two largest economies (US and China), the ECB meeting is likely to fade into the background.
The European Central Bank is widely expected to leave its bond purchases program unchanged this month.
That sets up the euro to be more reactive to Dollar-events, with EURUSD attempting to take advantage of the dollar’s disappointment following the NFP miss. The world’s most-traded currency pair is trying to reclaim the 1.22 mark, having recently found support at the 1.21 Fibonacci line.
Should the US May consumer price index register a lower month-on-month reading than the forecasted 0.4%, that could prompt investors into thinking that the Fed would be less inclined to adjust their support measures for financial markets. Such a narrative could lead to more weakness in the greenback, which in turn should translate into gains for the rest of the FX universe.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
Article by ForexTime
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com
- GBP Consolidates Amid Concerns Over Economic Growth and Wage Trends Mar 28, 2024
- The Australian and German indexes set all-time highs. The Reserve Bank of South Africa kept the rate at 8.25% Mar 28, 2024
- Target Thursdays: EURGBP, GBPUSD & Crude hit targets! Mar 28, 2024
- EURSEK: Hits fresh 2024 high at 200-day SMA Mar 27, 2024
- Australia has seen a decline in inflationary pressures. Japan may conduct currency intervention shortly Mar 27, 2024
- Australian Dollar Slides to Three-Week Low Mar 27, 2024
- Trade restrictions between the US and China are intensifying. Japan’s currency diplomats talk about possible intervention to support the yen Mar 26, 2024
- Japanese Yen Awaits Intervention Amid Weakness Mar 26, 2024
- NETH25 index chasing new record highs! Mar 26, 2024
- Stocks: What to Make of All This Insider Selling Mar 25, 2024