Markets burst into life last week. At the open of European trading on Monday the 21st, the markets took a glance in the rear-view mirror and a ten-minute tumble followed. However, after the momentary slump, comments from the US Fed about proposed interest rate rises were discounted and the markets took off. By Friday, a range of risk-on assets, including the S&P 500, were closing in on record highs. Even ‘underperformers’ such as the FTSE 100 managed to take advantage of the positivity.
|Instrument||21st Jun||28th Jun||Hourly||Daily||% Change|
|GBP/USD||1.3806||1.3891||Strong Sell||Strong Sell||0.62%|
|FTSE 100||6,953||7,138||Strong Sell||Strong Sell||2.66%|
|S&P 500||4,147||4,284||Strong Sell||Strong Sell||3.30%|
|Silver||2,565||2,617||Strong Sell||Strong Sell||2.03%|
|Crude Oil WTI||71.44||73.81||Neutral||Strong Buy||3.32%|
|Bitcoin||34,346||34,409||Strong Sell||Strong Sell||0.18%|
Source: Forex Traders
The Week Ahead
Crude oil, FTSE 100, S&P 500, and silver were all up by more than 2%. The significant and rapid moves changed the tone of investor sentiment. The coming week is packed full of data releases that could support or stifle the upward momentum. These are the markets and news events to follow to spot the direction of the next move.
In terms of economic indicators, the current hotspots in the markets are jobs, inflation, and interest rates. There aren’t any headline announcements this week from major central banks, but there is plenty of news about jobs and prices, the topics that are likely to be of most interest.
- Japan – Unemployment Rate
- Japan – Retail Sales
- France – Q1 – Unemployment Rate
- Germany – Consumer Price Index
- USA – CB Consumer Confidence
- Germany – Unemployment Rate
- Eurozone – Consumer Price Index
- USA – ADP Employment Rate Change
- USA – Initial Jobless Claims
Friday – The big one
- USA – Non-farm Payrolls
Will NFP Disappoint – again?
The US Non-farm payroll number is a cornerstone of economic reports. While shock events such as Covid have recently diminished the impact that the number has on market prices, the report looks set to take centre stage this week.
The NFP number will provide further insight into the “will they, won’t they” question facing the world’s most influential central bank, the US Federal Reserve. For weeks and months, the Fed has held back any suggestions that its super-loose monetary policy might be hauled in early, and the report on Friday will offer the best clue as to whether that will be the case.
Is inflationary pressure really “transitory” as the Fed maintains? Any upside surprise in the job numbers would challenge that idea. Putting Friday’s report into context, the NFP numbers in recent months have been disappointing. There are jobs out there, but the signs are that some sectors are yet to recover from the pandemic fully.
The build-up to the NFP release is marked by the publication of data reports from Asia and Europe. Things should be clearer by next Friday’s close, but the journey there will involve navigating a few bumps in the road.
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