News

Dow Jones Hits Record; Dollar Tumbles Ahead of Jobs Data

Equities

Futures tied to major US stock indices rose significantly yesterday, with interest in value stocks relative to growth coming back to the scene. Investors seemed to favor cyclical stocks relative to tech stocks as the US continues to lift restrictions on activity with the massive vaccination plan going on course. The dip that took place in the middle of the week, pushed another noticeable flow to the equity markets with fundamental drivers remaining in place. Market participants are looking forward to the US jobs data later today. The Dow Jones Industrial Average futures rose to an all-time high of 34484, the S&P500 futures rallied to 4202, and the tech-heavy Nasdaq recovered to 13658.

USD

The dollar index which measures the greenback against a basket of major currencies fell sharply to 90.87 as investors favored risk assets with an upbeat recovery outlook. The US 10-year Treasury yields continued to fluctuate near 1.57%. The US Initial Jobless claims rose only by 498 thousand, the lowest reading since the beginning of the pandemic. The US jobs report will give us more insight into the labor market performance. Strong job creation, the unemployment rate falling with participation rate ticking higher will be in the Fed's favor, but also could lift yields again. The EURUSD rose to $1.2070, and the USDJPY held steady above 109.

Metals

Precious metals prices soared as the dollar took a hit ahead of jobs data. Investors are betting that despite an uptick in inflation, central banks will not change their policy path anytime soon. The price of a gold ounce rallied to $1821, the highest since mid-February, the price of a silver ounce advanced to $27.55, while palladium hovered near $2960.

Oil

Oil prices pushed slightly higher during the Asian session. Market participants are optimistic about the economic recovery, but also, they have to weigh what is happening in India. The West Texas Intermediate crude June delivery rose to $65.22, and the Brent blend July delivery rallied to $68.62.

Major Economic Events

GMT Country Event Expectation Previous

8:30

UK

 Construction PMI (Apr)

62.3

61.7

10:00

EZ

 ECB President Lagarde Speaks  

-

-

12:30

US

 Average Hourly Earnings (MoM) (Apr)

0.1%

-0.1%

12:30

US

 Nonfarm Payrolls (Apr)

978

916

12:30

US

 Unemployment Rate (Apr)

5.8%

6.0%

12:30

CA

 Employment Change (Apr)

-175.0

303.1

12:30

CA

 Unemployment Rate (Apr)

7.8%

7.5%

 

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