The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
NFP: prepare to trade on the news
|NFP (US nonfarm payrolls) is an important indicator of consumer spending that accounts for the majority of overall economic activity. If there are more employed people, consumer spending will increase supporting the US economy. US labor market figures will be released at 15:30 MT time on June 1.|
|Average Hourly Earnings’ data will be out at the same time as NFP. Average Hourly Earnings is the earliest data related to labor inflation. A rise of the data means higher salaries and as a result greater spending.|
|The greenback is strongly recovering. The US dollar index has already reached highs of December 2017. For the further movement upwards it needs an additional support of the US Federal Reserve. The market anticipates two additional rate hikes this year. The Fed is anticipated to raise the interest rate at its June meeting. Encouraging economic data will increase chances of a rate hike.|
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.