There are a number of interesting fundamental releases today to keep investors occupied.
First of all, New Zealand opened the economic calendar with its GDP growth rate data for the first quarter of 2021. The reports came in at 2.4% YoY and 1.6% QoQ, both significantly better than the forecasts.
Neighboring Australia also published some important data, namely labor market reports. The employment change number for May came in at 115K, or nearly four times higher than the forecast, and the unemployment rate dropped to 5.1% against an expectation of 5.5%. This data indicates a steady recovery and bodes well for the AUD.
The next major release today will be the final inflation rate reports for May from the eurozone. Core inflation is expected to be at 0.9% YoY.
Last but not least, as typical of any Thursday, we expect the initial and continuing jobless claims reports from the United States later today. Initial claims are forecasted to have dropped to 359K last week.
Aside from today’s data, investors are likely going to continue to be preoccupied with the outcome of yesterday’s Federal Reserve meeting. Quite surprisingly, the Fed announced that based on the current recovery temp, it might need to begin raising interest rates in 2023 instead of 2024, as predicted earlier.
This is a major development, as for over a year now the central bank has insisted that the recovery will be slow and gradual and no hawkishness will be necessary for some time yet.
The US dollar has strengthened on the announcement against virtually all major currencies. The big exception is the New Zealand dollar, which is bolstered by the strong performance of the local economy and risk appetite, so it is managing to resist the dollar at present.
Naturally, assets quoted in USD (gold, crude oil, etc.) are also going down in value to compensate for the dollar's inherent appreciation.
Other assets affected are stocks. European indices are all at a loss today, as are some major American indices like the S&P 500.
Another loss for the EU today was that the German coronavirus vaccine developed by CureVac did not perform well in the clinical trials and might not present a viable alternative to the several vaccines the EU has already approved.
