Sentiment was reinvigorated this past week as US benchmark stock indexes resumed the bounce off March lows. The haven-linked US Dollar[1] succumbed to selling pressure despite rising tensions between the United States and China over the latter’s proposed security law over Hong Kong[2]. Lockdown easing bets helped push WTI[3] crude oil prices to the best month on record.
There are plenty of event risks next week[4] for financial markets to digest. Three central banks from major economies are due: the RBA, BoC and ECB for Australian Dollar[5], Canadian Dollar[6] and Euro[7] traders respectively. While benchmark lending rates are seemingly likely to remain around zero, it is their assessment of economic conditions that will likely offer scope for volatility.
For those that are avid followers of the British Pound[8], Brexit talks resume and there is rising concern over progress as the late-June extension deadline approaches for the transition period. If there is no agreement on a postponement, then lawmakers will have until the end of this year for a Brexit deal. A lack in the latter risks adding more uncertainty to virus economic recovery efforts.
All eyes at the end of the week turn to May’s US non-farm payrolls report[9]. Despite the nation accumulating over 40 million jobless claims since March, the Dow Jones[10] and S&P 500[11] have not been thrown off. Investors are still likely still looking ahead to lockdown easing impacts as the Fed continues to lubricate credit markets with quantitative easing as it accumulates corporate debt.
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