Markets came fragmented just before the Non-Farm Payrolls report due to
be released on Friday. Stocks are rising along with a strengthening U.S.
Dollar. The safe haven role of the Dollar was revised as investors are assured
the $1.9 trillion relief bill would pass.
U.S. Treasuries yields resumed climbing, from 1.11% to 1.15%, rising
chances for a tight monetary policy from the Fed to arrive earlier than
expected 2023 deadline.
U.S. stock markets turned positive reclaiming losses of the previous
week. The S&P 500 broad market index rebounded to all-time highs at 3840
points, not least due to the excellent quarter reporting of Alphabet and
Amazon. Both tech giants beat forecasts of revenue and profit. Vaccination in
the United States has achieved robust pace as number of vaccinated outperformed
new infections.
Brent crude prices are close to the important psychological landmark of
$60 per barrel thanks to the crude reserves data that were much better than
expected. U.S. Energy information administration has reported a significant
decline in crude reserves and OPEC is now forecasting lack of crude supply in
2021. Despite a sharp rise of crude prices this week it won’t last long and we
may expect them to tumble soon.
Gold prices is losing its glance as an investment shelter and dropped
below $1800 per troy ounce amid rising U.S. Treasuries yields. Still, a
technical picture of a further decline to $1650-1700 is not clear yet.
The Euro dipped below weekly support level of 1.20000 vs the Greenback.
The cable in the opposite managed to hold at the support level of 1.36500 after
Bank of England hawkish statements. The Japanese Yen reached its strong
resistance level at 105.6 vs the Dollar.
Investors decided to take a breather after a turbulent trading to
prepare for the major event of this week – U.S. Non-Farm Payrolls report.
Consensus forecasts are looking more neutral with unemployment at 6.7% and new
non-farm jobs at 50,000 with average hourly earnings to rise by 0.3%.
We suggest U.S. labor market would perform better than expected with
116,000-170,000 new jobs, unemployment at 6.5% and higher rise of average
hourly earnings as labor spending performed a rise by 6.8% vs minus (-7.0%) a
month before.