Bullet Report | USD Recovers as Focus Turns to Non-Farm Payroll

Today’s calendar is highlighted by Non-Farm Payrolls which is expected to show 170k growth in May with unemployment rate unchanged at 5%. Today’s announcement is very important as the continuous communication from FED members indicated a very high probability for rate hike in June/July, so if the news reveals slower employment growth, this might stop the FED from proceeding with the hike, which would hurt the USD’s recovery seen in the last week.

Currencies: Yesterday, the ECB as expected kept all policy rates unchanged. In the introductory statement, Mario Draghi repeated that the QE purchases are intended to run until the end of March 2017, or “beyond, if necessary. Moreover, Draghi argued that additional monetary policy easing from measures already announced will follow when implemented. EURUSD remained broadly unchanged following the news and conference. GBP was little affected by UK Prime Minister David Cameron’s appearance on national television last night answering questions about the EU referendum. The JPY held steady at 108.915 per USD, after hitting a two-week high of 108.52 yesterday, a move some market players attributed to disappointment over a lack of a clear plan on stimulus from Japanese Prime Minister Shinzo Abe.

Stocks: Asian shares advanced on Friday as investors looked to U.S. employment data that could add to or detract from the case for a Federal Reserve interest rate hike this month or in July. Ahead of the two key events, Wall Street shares held firm, with the S&P 500 gaining 0.28 % to 2,105.26.

Oil and GOLD: Brent oil prices held around $50 a barrel on Friday following an OPEC meeting that failed to agree on output targets, but which was seen as supportive as Saudi Arabia pledged not to flood the market with more fuel. OPEC failed to agree to a clear oil-output strategy on Thursday as Iran insisted on raising production to regain market share lost during years of sanctions, which were lifted in January. GOLD is a little bit under pressure, trading in a narrow range of $1207 and $1215, waiting for NFP release to set further direction.

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