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Positive Data From The US Indicates Quick Economic Recovery, Fueling Fears Of Accelerating Inflation

Yesterday, the US Labor Department reported that 978,000 jobs were created in May, far above analysts’ forecasts of 654,000. The average number of initial jobless claims fell from 562,000 to 428,000. On the one hand, these statistics are a good sign of economic recovery. On the other hand, the faster the economy recovers, the more likely the Fed will start to scale back its stimulus measures in order to avoid a further rise in inflation. The non-farm payrolls report is expected to be released today. Positive data could lead to a strengthening of the dollar index. But analysts argue that this report will not be so good.

The stock indices in Europe didn’t show unified dynamics on Thursday. The German DAX increased by 0.19% at the end of the day, while the British FTSE 100 decreased by 0.61%. Investors are awaiting non-farm statistics today to forecast further monetary policy action.

The US oil inventories fell by 5.1 million barrels last week, and this resulted in the falling of the oil prices. However, experts believe that the fall in oil prices is temporary, as increased demand for oil in the summer season will make the “black gold” quotes move higher.

The US Treasury yields jumped yesterday, and that has sharply decreased gold prices. Gold futures with August delivery are currently trading at $1,873.55 per troy ounce. Despite the correction, analysts believe in further growth of precious metals prices.

Major indices of the Asia-Pacific region show mixed dynamics at the opening of trading on Friday. Japan’s Nikkei opened with a 0.51% decline while China’s Shanghai Composite decreased by 0.27%. Australia’s ASX 200 index increased by 0.06%. Asian stock indices are now strongly correlated with the US market, so significant price changes in America today, with a high probability, will have an impact on Asia as well.

Main market quotes:

  • S&P 500 (F) 4,192.85 -15.27 (-0.36%)
  • Dow Jones 34,577.04 -23.34 (-0.07%)
  • DAX 15,632.67 +29.96 (+0.19%)
  • FTSE 100 7.064.35 -43.65 (-0.61%)
  • USD Index 90.49 +0.58 (+0.64%)

Important events:

  • RBNZ Gov Adrian Orr Speaks at 10:00 (GMT+3);
  • SNB Chairman Thomas Jordan Speaks at 10:00 (GMT+3);
  • ECB President Christine Lagarde Speaks at 14:00 (GMT+3);
  • US Fed Chair Jerome Powell Speaks at 14:00 (GMT+3);
  • US ADP Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
  • US Unemployment Rate (m/m) at 15:30 (GMT+3);
  • Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
  • Canada Ivey PMI (m/m) at 17:00 (GMT+3).

 

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