Market Analysis

The US dollar is trading at multi-month highs

FOREX

The US dollar is trading at multi-month highs during the early part of Thursday’s session, following the publication of ADP’s preliminary US employment data late on Wednesday, which showed a higher-than-expected number of new hires of 690K versus the consensus of 600K. The ADP report carries less weight than the Non-Farm Payrolls, which will be published on Friday, and the correlation between the two hasn’t always been perfect. Still, last night’s positive figures fed into the impetus of dollar bulls, helping the greenback’s June performance to be the best since November 2016, with investors appearing to anticipate publication of tomorrow’s NFP employment data with optimism.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

OIL

Oil prices continued to rise during early Thursday trading, following the publication of US inventories data, which showed that stocks continue to decline. Meanwhile, investors now await the outcome of the OPEC+ meeting occurring today, with the consensus pointing at an increase in output in the order of half million barrels per day, which, according to several analysts, will not be sufficient to meet growth in demand. Therefore, the outlook for oil remains bullish, with scope for further gains in the days ahead.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

 

EUROPEAN SHARES 
Stocks edged significantly higher in Europe for the first day of the second half of the year, alongside US futures, while Asian shares closed mixed. Investors cheered the historical performances registered in the first half by most EU benchmarks ahead of key US data today and tomorrow. Moreover, investors are particularly willing to reward nations with the most serious vaccination programs, as they provide much more clarity on the short to mid-term outlook than other struggling countries. However, this bullish trading mood may get shaken by the end of the week as investors are also waiting for major macro data from the US with today’s Initial jobless claims, ISM Manufacturing PMI as well as tomorrow’s NFP job report. While solid data will be good news for the overall economy, it could also revive inflation fears and tapering discussions which could seriously dent market sentiment over the summer season.

Technically speaking, EU indices remain well oriented. The Stoxx-50 index keeps on trading inside its mid-term bullish channel, with prices currently registering a strong rebound over the lower band. Next targets can be found towards 4,150/4,185 pts and 4,225 pts on the short-term basis.

Pierre Veyret– Technical analyst, ActivTrades

 

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