Victor Camargo
05/11/2021
This Tuesday, the DXY index tested, earlier in the session, its lowest point at 10weeks at 89.98. The dollar remains under pressure after the jobs reportdisappointing report released on Friday. The improvement in feeling especially withEurope’s economy has also been putting pressure on the US currency.In addition, Robert Kaplan, president of the Dallas Fed, made some comments thatfueled speculation that the Fed might need to tighten policy sooner than ifhoped to prevent the economy from overheating.
Stable close to its highest level in 3 months, gold was trading ataround USD 1830 an ounce, supported by a weaker dollar, which increasedinflation expectations and a decline in treasury yields. Inflation expectationsannual average in the USA increased to 3.4% in April 2021, the highest level sinceSeptember 2013. Investors are now awaiting US inflation data in theend of this week to better assess the country’s economic recovery.
Wall Street sank today, with the Dow Jones falling more than 1.5%, the S&P 500 about1.3% and Nasdaq just over 0.5%, with the sell-off extending beyond thetechnology amid growing concerns about rising inflation. Expectedthat the report to be released tomorrow shows a jump in the inflation rate for itshighest level since September 2011. In the corporate part, Simon Property Group fellalmost 4% after saying it does not expect a return to 2019 occupancy levelsuntil next year or 2023; and L Brands plummeted more than 5% after the companyannounced plans to split into two publicly traded companies.
In Europe, indices were also down sharply, with the DAX 30 plummetingmore than 2%. Data from China showed that consumer price inflation hitin April the biggest increase in seven months, and factory prices rose by the fastest ratein three and a half years, while wholesale price inflation in Germany reached its peakhighest level in a decade. Investors are now awaiting CPI data forUSA on Wednesday, with many expecting a recovery in inflation. Aheadcorporate, Thyssenkrupp raised its forecast for the entire year for the second time inthree months, while E.ON posted a profit and K + S raised its profit forecastmain. In front of economic data, German investor morale jumped in Mayto the highest level since 2000.
The ZEW Indicator of Economic Sentiment for Germany jumped 13.7 points fromthe previous month to 84.4 in May 2021, the highest level since February 2000 andwell above expectations of 72.0. Investors expect a recoverysignificant economic growth in the next six months, with the deceleration of the third waveCOVID-19 and the reopening of the economy. About 85.5% of the analysts interviewedforesee an improvement in economic activity in the coming months, while 1.1%of them expect a worsening and 13.4% do not expect changes. The situation indicatorGermany’s current economic growth has increased 8.7 points to -40.1.
The number of openings in the United States increased by 597 thousand in relation to the monthprevious year, to 8.123 million in March 2021, the highest level since the beginning of the series inDecember 2000 and well above expectations of 7.5 million. Jobs werecreated in various sectors, led by accommodation and food services(+185,000); state and local government education (+155,000); and arts, entertainment andrecreation (+81,000). Meanwhile, the number of job vacancies has decreased in the area ofhealth and social assistance (-218,000). The number of job vacancies has increased inNortheast and Midwest regions. The number of hires increased by 215 thousand, to6.009 million, while total leave fell by 107 thousand, to 5.322 million.
Source: https://wintrademarkets.com/news
