Equities are higher this morning as lockdown measures ease but civil unrest in the U.S. is a new concern.
- This week, the US jobs report will be in the spotlight, with markets forecasting a payroll decrease of 8.25 million while the unemployment rate is seen jumping to a record high of 19.7%. Other important releases for the US include ISM PMIs, trade balance and factory orders. Elsewhere, the Bank of Canada and the RBA will hold their monetary policy meetings although no changes are expected. Also, the ECB is seen keeping rates steady but the further stimulus is likely to be announced. PMIs readings for China, the UK, Germany, Eurozone, Japan and GDP release for Australia and Switzerland will also be watched.
- Oil prices climbed nearly 4% in Friday’s session to book its best month on record with an 87% gain in May. An uptick in demand as well as record supply cuts has pushed prices higher. WTI prices are still 45% below its recent January high of $65.65 per barrel.
- The Official NBS Non-Manufacturing PMI rose to 53.6 in May 2020 from 53.2 in a month earlier. This was the third straight month of growth in the service sector and the strongest since January. New business grew faster (52.6 vs 52.1 in April) on the back of a slower rate in overseas sales (41.3 vs 35.5), with employment was little-changed (48.5 vs 48.6). Meantime, suppliers’ delivery time lengthened further (52.9 vs 51.0). On the price front, input cost increased for the first time in four months (52.0 vs 49.0), while selling prices decreased the least since January (48.6 vs 45.4). Finally, sentiment strengthened noticeably (63.9 vs 60.1).
- The coronavirus pandemic brought an extraordinary amount of uncertainty and considerable risk to the economy, FOMC minutes showed. Interest rates will be kept near zero until a recovery is firmly in place and the Federal Reserve is committed to using a full range of tools to support the US economy. Fed officials also noted that a second wave of the coronavirus outbreak with another round of strict restrictions could drag the US economy deeper into recession prompting a jump in unemployment and renewed downward pressure on inflation.
- On Friday: European stocks closed sharply lower, as stocks fell on heavy selling after escalating tensions between the U.S. and China outweighed optimism about economic recovery following reopening of businesses in several parts across the globe. US stocks showed wild swings over the course of the trading day before eventually ending the session mostly higher. With the upward move, the Nasdaq reached a new three-month closing high and the S&P 500 ended the day at its best closing level since early March. Asian stocks ended mixed in cautious trading on Friday as the U.S.- China rift over Hong Kong clouded the outlook for en economic recovery and investors awaited the U.S. response to China’s passage of a national security law for Hong Kong
- Friday’s data below:
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