The global economy is hard to predict. Major events around the world play a vital role in shaping the economy. In our weekly market overview, we discuss these key drivers and price action that can help you form the right expectations for the future of foreign exchange, stocks, cryptocurrencies, and commodities markets.
Forex Weekly Overview
The dollar fell on Friday as risk appetite increased ahead of U.S. jobs data later in the day.
Stocks rose as investors hoped that U.S. data would convince the Federal Reserve to slow the currently aggressive pace of interest rate hikes in the coming months.
On Thursday, the ADP National Employment Report showed that U.S. payrolls grew at a slower slower-than-expected pace last month.
On Friday, trading was quieter as London markets were closed for a bank holiday.
The dollar was down 0.1% at $101.75 against a basket of other major currencies. Meanwhile, the euro was up 0.1% at $1.0747.
Investors have been divided on the dollar since hitting a 10-year high in mid-May.
Bullish analysts believe the Fed’s tightening cycle is based on a more robust growth story than Europe, especially after Russia’s oil embargo, which could hurt the eurozone economy.
The European Union has decided to impose an embargo on Russian crude oil imports, fully affected by the end of the year.
Minutes from the Fed’s May meeting showed that the central bank might stop tightening once interest rates were neutral.
How Are Other Currencies Doing?
Meanwhile, the Swiss franc hovered near mid-May levels after SNB President Thomas Jordan suggested the central bank could act if inflationary pressures persist.
The Swiss National Bank has maintained its ultra-easy policy so far, but prices in Switzerland rose to their highest level in nearly 14 years in May.
The yen traded near 10-year lows near 130 against the dollar as the Bank of Japan (BoJ) maintained its ultra-low interest rate policy.
Bank of Japan Governor Haruhiko Kuroda said that if household income growth remains weak, excessive price increases are not desirable.
The Canadian dollar was flat at 1.2571 after rising the previous day as the Bank of Canada opened the door to a more aggressive tightening pace.
Stocks Weekly Overview
What’s new in the stock exchange? On Friday morning, stock futures were lower as investors turned their attention to critical jobs data later in the day.
Futures linked to the Dow Jones Industrial Average fell 79 points or 0.2%. S&P 500 futures were down 0.3% and Nasdaq 100 futures were down 0.6%.
Tesla shares fell 4% in premarket trading, citing an internal email saying CEO Elon Musk planned to cut 10% of his workforce. Musk also said that he has a “super bad” feeling about the economy in an email.
Traders are looking ahead to the May jobs report at 8:30 a.m. ET. While job growth should slow in May, economists say the job market remains strong even as some economies weaken.
According to a Dow Jones survey, economists assumed 328,000 jobs were created in May, down 100,000 from April. The consensus estimate is for wages to rise 0.4%, faster than the 0.3% gain in April.
In addition to farm payrolls, traders also look to new PMI data from Markit and ISM later in the morning.
What Are The Predictions In Stock Market?
Stocks strengthened, with the major indexes rising for the first time in three sessions, setting up for a successful week. The Dow rose 435.05 points or 1.3%. The S&P 500 gained 1.8%, and the Nasdaq Composite gained 2.7%.
Thursday’s gains pushed the critical moving averages higher for the week. The S&P 500 gained 0.5%, the second straight weekly gain.
On Thursday, trading started in choppy trading as investors were divided over the prospect of a recession and whether the Federal Reserve might pause interest rate hikes.
Investors also digested jobs data from ADP this morning, which showed the slowest pace of job creation during the pandemic recovery.
But shares rallied late in the session to close near the session high as investors saw value in tech and other hard-hit stocks amid a pullback this year.
Crypto Weekly Overview
Major cryptocurrencies traded in the green early on June 3, with the global cryptocurrency market capitalization rising 2.01% to $1.26 trillion on the final day. Over the past 24 hours, total crypto market volume fell by 28.45% to $69.74 billion.
DeFi’s total trading volume was $5.38 billion, accounting for 7.72% of the total 24-hour crypto market volume. The trading volume of all stablecoins was $59.36 billion, accounting for 85.11% of the total 24-hour crypto market volume.
The world’s largest cryptocurrency market dominance increased by 0.21% to 46.22% on the last day.
What Are The Overall Crypto Expectations?
Several cryptocurrency industry players have said that thousands of digital tokens could collapse, while the number of existing blockchains will also decline in the coming years.
There are over 19,000 cryptocurrencies and dozens of blockchain platforms. Blockchain platforms like Ethereum are the underlying technology on which these different cryptocurrencies are built.
The recent debacle of the so-called algorithmic stablecoin TerraUSD and its related digital token Luna sent shockwaves through the market, drawing attention to the thousands of cryptocurrencies in existence and whether they all survive.
Commodities Weekly Overview
Oil prices rose for a sixth straight week after the much-anticipated OPEC+ meeting resulted in only a modest increase in output, failing to ease concerns about a widening supply shortage.
The producer cartel agreed to increase global demand by just 0.4% in July and August. There has been speculation that Saudi Arabia is preparing to significantly increase production to adjust its relationship with the United States. Some suggest Russia could be exempt from the alliance’s monthly supply agreement.
OPEC+ approved an increase of 648,000 barrels per day in July and August, about 50% higher than in recent months. This means the group will add around 400,000 barrels of crude oil per day over the two months. Additionally, the moderate increase is already agreed upon.
The OPEC+ decision could mean an absolute increase of 132,000 barrels per month in Saudi Arabia, the UAE, Kuwait and Iraq, and Citigroup. The season for higher prices has kicked off over the past week as markets assess EU action, China’s lifting of lockdowns, and the U.S. summer drive.
The European Union also approved a partial ban on Russian oil imports on Thursday. The decision will likely lead to a tighter market in the coming months.
Oil prices slipped in Friday’s trade, giving back some of Thursday’s gains after a gauge of European economic confidence fell, with S&P Global’s composite purchasing managers’ index for Germany, France, and Italy falling.
Has Gold Price Changed?
Gold prices hit a one-month high on Friday, supported by a weaker U.S. dollar, propelling a third straight weekly gain.
Spot gold touched its highest level since May 9 before falling slightly. The metal remains on track for a weekly gain.
Gold prices rose more than 1 percent on Thursday. A weaker dollar helped gold, and data showing U.S. personal employment rose less than expected last month.
Signs of an economic crisis are likely to support gold demand as investors see gold as a safe-haven asset.
Meanwhile, the Fed is likely to tighten monetary policy by more than half a percentage point in each of its next two meetings.
Higher U.S. short-term interest rates increase the opportunity cost of holding interest-free gold.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell 0.1% to 1,066.04 tonnes on Thursday, compared with 1,067.20 tonnes in the previous session.
Watching market updates is an important part of a trader’s daily life. Our weekly overview shows some general news that has changed the market this week. We hope you find our overview helpful in formulating future market forecasts.