Today, all investors’ attention is focused on the Nonfarm Payrolls report. Positive labor market data can be interpreted ambiguously. On the one hand, if the report is too good, investors may start selling their portfolios on expectations of the Fed’s stimulus cuts. On the other hand, the unemployment rate has to demonstrate the number of 2,000,000 new jobs every month (700,000 according to the plan) to reach pre-crisis levels. But the market does not believe in such great optimism as the number of new jobless claims was higher than expected yesterday. All three major US indices closed the session in the green zone, and the S&P 500 renewed its record high for the sixth consecutive day.
European stock indices increased yesterday. Britain’s FTSE 100 jumped by 1.25%, Germany’s DAX increased by 0.47%, and France’s CAC 40 added 0.71%. The Unemployment Rate in the 19 countries of the eurozone fell from 8.1% to 7.9% in May 2021, which is the lowest rate since May 2020. The European Union’s COVID-19 digital certificate system came into operation on Thursday, allowing the EU residents to travel all over Europe’s Schengen area without any restrictions.
The OPEC+ meeting was rescheduled until Friday after the representatives from the United Arab Emirates didn’t agree with the current deal to increase the production by 0.5 million barrels per day. There were doubts whether OPEC+ representatives will be able to come to a common consensus about increasing production. But oil prices continue to rise just before the meeting. If OPEC+ fails to reach an agreement, the inflationary pressure in the global economy may increase.
The US government bond yields remain low and are likely to continue to decline in the second half of 2021. This fundamental situation plays in favor of rising gold and silver prices. It all depends on whether the Fed will cut stimulus at its next meeting on July 27.
Asian stock market is trading with mixed dynamics. The rapid spread of the Delta strain in Asian countries has a negative impact on investors and the financial market as a whole. During the trading session on the Hong Kong Stock Exchange, many well-known companies showed a significant decline. It’s Xinyi Solar Holdings Ltd. (-9%), Geely Automobile Holdings Ltd. (-4.9%), Sunny Optical Technology Group Co. (-4.4%), BYD Co. (-3.8%), Alibaba (NYSE:BABA) Group (-3.7%). At the same time, Japan’s Nikkei 225 index increased slightly on the background of gains by Mazda Motor (+5.5%), Nissan Motor (+3%), Isuzu Motors (+3%), and Sony (+3.5%). Yesterday, the Chairman of the People’s Republic of China gave a speech on the occasion of the 100th anniversary of the Chinese Communist Party. Xi Jinping promised to achieve the “reunion” with self-governing Taiwan and vowed to “crush” any attempts to achieve formal independence for the island. According to the Financial Times, the US and Japan have both activated the planning of a military confrontation with China in consideration of the situation with Taiwan in recent weeks.
Main market quotes:
- S&P 500 (F) 4,319.94 +22.44 (+0.52%)
- Dow Jones 34,633.53 +131.02 (+0.38%)
- DAX 15,603.81 +72.77 (+0.47%)
- FTSE 100 7,125.16 +87.69 (+1.25%)
- USD Index 92.56 +0.13 (+0.14%)
Important events:
- ECB President Christine Lagarde Speaks at 15:30 (GMT+3);
- US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
- US Unemployment Rate (m/m) at 15:30 (GMT+3);
- Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
- OPEC+ Meetings, all day.
