In the absence of too many relevant reports today, the financial markets are likely to still process some of yesterday’s publications.
For example, yesterday’s jobless claims data in the United States has disappointed many. Initial jobless claims were supposed to have dropped slightly compared to the previous week but instead they increased above 400K, showing that the US lost about 50,000 more jobs than expected this week.
Continuing claims also continue stubborning above 3.5 million. Though this number is still considerably better than the nearly 8 million jobless claims at the height of the pandemic, it is a reminder that the US job market is a bit slow to recover.
Disappointing as this data was, it did little to weaken the dollar or alter the predominant sentiment among investors, who were surprised earlier this week by the statements of the Federal Reserve that a rate hike might come a year earlier than planned.
The dollar index today is moving around 91.93, just short of the maximum of 92 it reached yesterday, its highest level in around two months.
Due to the continued reign of the US dollar, assets quoted in USD remain somewhat lower, most notably crude oil. Though the overall outlook for oil remains positive due to signs that the global economy is recovering and the coronavirus pandemic is fading away, prices retreated slightly this week after the Fed’s announcement.
Today we find the Brent crude at $72.44 and the WTI at $70.51. Thanks to all of the market optimism, it is possible to see oil rise again when the impact of the Fed policy meeting fades.
As for events from today, there was a monetary policy meeting of the Bank of Japan earlier. The regulator left the interest rate unchanged at -0.1%. The decision comes as inflation in Japan in May climbed to -0.1%, still in deflationary territory.
Other publications today included the May retail sales reports from the United Kingdom, where both numbers failed to meet the forecasts. Canada will publish its new housing price index later today.
