Here is what you need to know on Friday, June 3:
Following Wednesday's decisive rebound, the US Dollar Index lost its traction and erased a large portion of its weekly gains on Thursday. Markets remain relatively quiet early Friday as investors await the US Nonfarm Payrolls (NFP) data for May. US stock index futures trade flat after having recorded strong gains on Thursday and the benchmark 10-year US Treasury bond yield continues to move sideways near 2.9%. The European economic docket will feature the April Retail Sales report. Ahead of the weekend, the ISM Services PMI report from the US will be looked upon for fresh impetus as well.
Nonfarm Payrolls Preview: It is all about the money, three scenarios for wage growth and the dollar.
The data published by the ADP showed on Thursday that private-sector employment in the US rose by only 128,000 in May. This marked the lowers print since the beginning of the coronavirus pandemic and missed the market expectation of 300,000 by a wide margin, triggering a fresh dollar selloff.
Lael Brainard, Vice Chairwoman of the US Federal Reserve, told CNBC on Thursday that it was very hard to see the case for a pause in rate hikes in September. “We’re certainly going to do what is necessary to bring inflation back down,” Brainard added and reiterated that the economy still has a lot of momentum. Nevertheless, these hawkish remarks failed to help the dollar gather strength against its rivals.
Markets expect NFP to rise by 325,000 in May following April's increase of 428,000. Analysts at Goldman Sachs, however, said that they expect a 225,000 growth. "Job growth tends to slow during the spring hiring season when the labour market is tight—particularly in May before the arrival of the youth summer workforce—and all four Big Data employment indicators we track suggest a below-consensus report," analysts explained.
Meanwhile, OPEC and its allies decided to ramp up oil production by nearly 650,000 barrels per day in July and August, compared to the 400,000 barrels per day increase planned initially. The group, however, refrained from excluding Russia from future quotas. Crude oil prices jumped in the second half of the day on Thursday and the barrel of West Texas Intermediate gained nearly 2.5% before going into a consolidation phase near $117.00 early Friday.
EUR/USD consolidates its gains near 1.0750 following Wednesday's sharp upsurge. Retail Sales in the euro area are forecast to rebound in April following the 0.4% contraction recorded in March.
GBP/USD erased a large portion of its weekly losses on Thursday but seems to have lost its bullish momentum before testing 1.2600. UK markets will remain closed on Friday and the dollar's reaction to the US data could drive the pair's action.
Gold extended its rebound amid broad dollar weakness and broke above $1,860 on Thursday. At the time of press, XAU/USD was moving sideways at around $1,865.
US May Nonfarm Payrolls Preview: Analyzing gold's reaction to NFP surprises.
For the second straight day, USD/JPY trades within a touching distance of 113.00. Bank of Japan Governor Haruhiko Kuroda reiterated earlier in the day that they must maintain an easy policy to create an economic environment where wages can rise more.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to gains near 1.0700, awaits key US data
EUR/USD clings to gains near the 1.0700 level in early Europe on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
Meta takes a guidance slide amidst the battle between yields and earnings
Meta's disappointing outlook cast doubt on whether the market's enthusiasm for artificial intelligence. Investors now brace for significant macroeconomic challenges ahead, particularly with the release of first-quarter gross domestic product (GDP) data on Thursday.