News

US Stock Futures Race Higher; Dollar Extends Losses ahead of Jobs Data

Equities

Major US stock index futures raced higher during the Asian session as investors await the US jobs report. The ADP Nonfarm employment change came out on Wednesday, showing that the US lost only 2.76 million jobs versus expectations of 9 million. The report lifted investors' appetite as it signaled that the real impact of COVID19 on the US Labor market could be softer than anticipated. On the other hand, the risk sentiment was enhanced by the European Central Bank expansion of its pandemic Emergency Purchase Program by an additional 600 billion Euros. The Dow Jones Industrial Average futures rose to a three-month high of 26631, the S&P500 futures rallied to 3136 after snapping a four-day winning streak, and Nasdaq futures advanced to 9702, to tackle the record high of 9742 posted yesterday.

EUR

The Euro soared against rivals as the European Central Bank delivered its commitment to support the economy and expanded the Pandemic Emergency Purchase Programme by an additional 600 billion euros. The banks moved lifted investors' confidence in its willingness to do whatever it takes to support the economy. The EURUSD jumped to a three-month high of $1.1383, the EURCAD ascended to 1.5345, and the EURJPY rallied to a thirteen-month high of 124.43.

USD

The dollar index, which measures the greenback against a basket of major currencies, extended losses dropping to 96.44 as the European Central Bank enhanced risk appetite by ramping up its easing measures. Market participants are currently looking forward to the US jobs report that will be published later today to check the strength of the impact of covid19 on the US labor market and economy.

Gold

Gold prices drifted lower earlier today, erasing partial gains earned yesterday, as investors await US jobs data. If the report shows a drastic impact of the coronavirus outbreak on the labor market in May, it could push the Federal Reserve towards more stimulus to fight unemployment and its effect on the economy. The price of a gold ounce is trading slightly below $1710, the price of a silver ounce is almost unchanged near $17.65, and palladium futures are steady at $1950.

Oil

Oil prices inched slightly higher as investors await fresh clarity over the commitment of OPEC+ towards extending the output cuts further. The West Texas Intermediate July delivery rose to $38.02, and Brent blend August delivery rallied to $40.88. Market participants are looking forward to the Baker Hughes oil rig count to see whether oil producers in the states resumed production as prices increased.

Major Economic Events

GMT Country Event Expectation Previous

12:30

US

 Average Hourly Earnings (MoM) (May)

1.0%

4.7%

12:30

US

 Nonfarm Payrolls (May)

-8.000

-20.500

12:30

US

 Unemployment Rate (May)

19.70%

14.70%

12:30

CA

 Employment Change (May)

-500.0

-1,993.8

12:30

CA

 Unemployment Rate (May)

15.0%

13.0%

14:00

CA

 Ivey PMI (May)

-

22.8

17:00

US

 U.S. Baker Hughes Oil Rig Count

-

222

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