The preliminary employment data from ADP showed that the US private sector added 692,000 jobs in June, 92,000 more than economists expected. Investors are now waiting for Nonfarm Payrolls data from the government to gauge the labor market recovery. The previous figure was 559,000 jobs, while analysts are expecting a figure of 700,000. The dollar index increased by 0.32% amid such a positive situation, and the S&P 500 closed at a record high again. But investors should be cautious because Friday’s positive labor market data could lead to a review of monetary policy by the Federal Reserve, which, in turn, could send the major US indices into a mid-term correction.
European stock indices were slightly down at the end of the day. The EU consumer price index, which is the most important indicator of inflation, remained at the same level. Therefore, the ECB’s monetary policy is likely to remain in place. The macrostatistics data on manufacturing activity in Europe will be published today. Positive data might be a trigger for the growth of European stock indices. But tough new restrictions on tourist arrivals from the UK to some European countries are putting negative pressure on indices.
OPEC+ countries may increase oil production by 444,000 barrels per day from July 1. Saudi Arabia is lifting its voluntary production limits, which could lead to a total increase in “black gold” production by 841,000 barrels per day. Many analysts are confident that the price of oil will reach $100 per barrel as early as this year. On the other hand, an increase in production will make up for the supply shortage, which, on the contrary, is a trigger for a price decrease instead of growth. But even taking into account the increase of production, the market is still experiencing a deficit of fuel, so the growth of quotes up to $80-85 per barrel is very probable.
The price of gold and silver is recovering as Treasury yields are declining again. Precious metal prices are now at good buying points in the mid-term perspective. As long as the Fed’s soft monetary policy remains in place, gold and silver will grow.
The Large Manufacturers Confidence Index in Japan improved in the second quarter to a two-and-a-half-year high. Non-manufacturing sentiment also improved to plus 1 from minus 1 in the previous survey, reaching the highest index value since March 2020. Service sector sentiment is also positive for the first time in five quarters, indicating a recovery in Japan. However, the Nikkei 225 index did not react to this positive sentiment, and the USD/JPY currency pair reached its highest level in the last 3 months.
Main market quotes:
- S&P 500 (F) 4,297.50 +5.70 (+0.13%)
- Dow Jones 34,502.51 +210.22 (+0.61%)
- DAX 15,531.04 -159.55 (-1.02%)
- FTSE 100 7,037.47 -50.08 (-0.71%)
- USD Index 92.34 +0.30 (+0.32%)
- Japan Tankan Large Manufacturers Index (q/q) at 02:50 (GMT+3);
- Japan Tankan Large Non-Manufacturers Index (q/q) at 02:50 (GMT+3);
- ECB President Lagarde Speaks at 10:00 (GMT+3);
- French Manufacturing PMI (m/m) at 10:50 (GMT+3);
- German Manufacturing PMI (m/m) at 10:55 (GMT+3);
- Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
- UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
- Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
- US Initial Jobless Claims at 15:30 (GMT+3);
- US ISM Manufacturing PMI at 17:00 (GMT+3);
- US Natural Gas Storage (w/w) at 17:30 (GMT+3);
- UK BoE Gov Andrew Bailey Speaks at 22:00 (GMT+3);
- OPEC+ Meetings, all day.