After Friday’s strong emotions, the Dollar Index is pretty much flat on the day as the foreign exchange market pauses for breath during early Monday trading. Against all expectations and predictions, the US economy added 2.5 million jobs during May, a sign that the economic recovery may be faster than expected. As the future looks a little brighter it is now more likely that at this week’s meeting the Fed will decide to keep decisions on hold, a stark change from only a few days ago, when more easing was widely expected. This change in perspective is providing support to the dollar.
Ricardo Evangelista – Senior Analyst, ActivTrades
The strong US jobs figures released on Friday have added more fuel to the rally on stocks, keeping alive the risk on scenario that has prevailed over the last few weeks. Negative rates now seem less likely and the gold price has declined below $1,700 as investors are seeing less urgency of adding yellow metal to their portfolio while there is still appetite for shares.
Carlo Alberto De Casa – Chief analyst, ActivTrades
The oil price has started the new week in green as investors are celebrating the deal reached by OPEC+ over the weekend. The WTI price for both July and August expiry has now reached and surpassed the psychological threshold of $40, while the general sentiment remains positive as markets are betting on a quick recovery of economies and with it a return to the pre-lockdown global oil demand.
Shares in Europe traded in a mixed pattern on Monday as market sentiment becomes more nuanced. The risk appetite remains, especially after last Friday’s US NFP topped estimates and sparked hopes of a quick recovery in the second half of the year. Demand is rising in almost all sectors and countries around the world continue to ease lockdown while the spread of virus slows. Without any significant bearish leverage in sight, there is a high chance that investors chose to take a bit of profit following last week’s solid +300pts rally on the Stoxx-50 Index and ahead of another busy week. Nonetheless, last week’s much better-than-expected US jobs report may have pushed some investors to price a less dovish tone from the Fed’s upcoming meeting on Wednesday, which could lead to less directional markets this week.
The Stoxx-50 Index is currently making a corrective move below 3,385pts, the upper band of its mid-term bullish channel. Even if 3,285pts and 3,225pts remain the major supports to prices, another one could form today from the 13-period moving average above 3,320pts.