Despite positive non-farm data on Friday, the dollar index fell, since the values did not exceed the analysts’ expectations. The number of jobs increased by 559,000 in May, which is 90,000 below expectations. At the same time, the unemployment rate decreased from 6.1% to 5.8%. Statistics on the labor market have become a great relief for investors. As a result, the US stock indices closed with growth. But on Thursday, the US consumer price index (CPI) report will be published in the United States. It’s the most important inflation indicator, which determines the further plans of the Federal Reserve. Negative statistics on CPI will continue the fall of the dollar index.
European stock indices also increased by the end of Friday. The British index FTSE 100 increased by 0.07%, the German DAX added 0.39%, French CAC 40 increased by 0.12%. This week on Thursday, the ECB will report the Interest Rate Decision, so no significant changes in the indices are expected to occur before that time.
The resumption of negotiations on Iran’s nuclear program and removal of sanctions are expected to take place this week. This factor may negatively affect the oil quotes. But experts are confident that negotiations will be delayed at least before the presidential elections in Iran, which are scheduled for June 18.
Against the background of the dollar index fall, the price of gold jumped sharply on Friday. It is now very important to keep track of both the dynamics of the US currency and the profitability of the US bond yields. The growth of bond yields and the dollar index negatively affects the gold prices. But the market conditions are currently showing that the dollar index will continue to decline. With the current low yield of bonds, this situation will increase the prices of gold, silver, and other drag metals.
Following Friday, Asia’s stock markets have grown a little. But at the opening on Monday, the Asian market started to decline. Japanese Nikkei has already lost 1%, and Chinese “blue chips” fell by 0.3% before the release of data on export and import for May. In Taiwan, an outbreak of coronavirus is enhanced, which has already led to huge financial losses among semiconductor and microcircuit manufacturers. The global shortage of semiconductors reached such a mark that the manufacturers have orders for 2 years ahead.
Main market quotes:
- S&P 500 (F) 4,229.89 +37.04 (+0.88%)
- Dow Jones 34,756.39 +179.35 (+0.52%)
- DAX 15,692.90 +60.23 (+0.39%)
- FTSE 100 7,069.04 +4.69 (+0.07%)
- USD Index 90.13 -0.38 (-0.42%)
Important events:
- China Trade Balance (m/m) at 06:00 (GMT+3).
