Today, May 7, will be rich in economic reports from all around the world. First off, Australia’s RBA released a statement regarding its monetary policy, which revealed that the bank sees Australia reaching satisfactory levels of inflation and unemployment only in mid-2023. Thus, it does not plan to hike interest rates at least until 2024, unless there are unexpected improvements in the global and Australian economy in the meantime.
China released its Caixin indices today, with both the composite and the services PMIs for April higher than they were last month. Trade data out of China was also overwhelmingly positive. This contributed to yet another rally in metals: iron and copper did especially well. Other notable mentions include aluminum, nickel, and zinc.
Among commodities, crude oil is not doing too well today due to the ongoing coronavirus crisis in India. The value of the Brent crude dropped to $68.02, while the WTI crude reached $64.63 per barrel, once again providing that the $70 highs were short-lived and unsustainable during a global pandemic.
Not much in terms of fundamentals is expected in Europe today, besides a few mixed reports on the trade balance, industrial production, and retail sales in Germany, France, and Italy, respectively.
The most important releases will come out of North America later today. Canada will publish its unemployment rate and employment change reports for April.
Furthermore, the United States will deliver its own unemployment numbers and non-farming payrolls, which have become one of the most important releases for the markets. After all, the Federal Reserve is using labor market data to determine its monetary policy course.
Although close to 1 million new jobs are expected to have been created last month, continuing jobless claims (released yesterday) show that there are some 8 million people who are unemployed. Thus, it will take a lot more to recover all the jobs lost in the pandemic.
Today US stock indices will trade moderately higher. There is still some apprehension due to the continuing earnings season, but overall sentiment seems to be risk-positive, which is good for stocks.
