Today the troubles of cryptocurrencies continue. After yesterday China announced a new ban on trading this entire asset class, most cryptocurrencies slumped. This negative trend continues today, with Bitcoin remaining below $40,000 and other cryptocurrencies also decreasing in value as we speak.
US stock indices will also continue to lose positions today due to the overall pessimism about cryptocurrencies leaking towards other investments as traders try to shift their portfolios.
Moreover, if employment reports from the US today prove better than anticipated, this could once again strengthen the view that the Federal Reserve might have to tighten its monetary policy sooner than planned, which is also a downside pressure factor for stocks.
In terms of fundamentals, today investors received somewhat of a mixed bag of reports on employment in Australia. The employment change of -30.6K was certainly disappointing, but the unemployment rate in April dropped more than anticipated despite that, which bodes well for the Australian economy.
As is typical of any Thursday, later today we expect the initial and continuing jobless claims reports from the United States. Note that labor data is pretty important for the Federal Reserve and if the reports fail to meet the forecasts, the dollar can weaken further.
In other news, Iran came forward with claims that it has managed to craft a new deal to help lift the international sanctions against it. President Rouhani claimed that there is legislation that can bring the country back towards the UN deal signed during Barack Obama’s presidency of the United States.
Nevertheless, the markets might want to take this news with a grain of salt, as the European Union has stated that the new agreement does not appear to be on the same level, and the United States has not spoken about a deal with Iran at all.
If it does pass, however, Iran will once again be one of the major suppliers of oil globally, which is going to drive oil prices down. Some of this is already happening, with the Brent crude dropping to $65.24, and the WTI brand falling to $62.23 per barrel.
