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Stocks Revive, US Dollar Declines as China Reopens

Stocks in Asia and US futures went up and seem to be recovering losses today, Monday, after China’s fewer Covid-19 cases prompted the easing of the local lockdowns. China is slowly getting back to normal with Shanghai planning to open on June 1, after a two-month lockdown, while in Beijing some malls and parts of public transport were reopened on Sunday.

Global Stock Markets News

In the Asian stock market, Japan’s Nikkei (JP225) and Hong Kong’s Hang Seng (HK50) advanced over 2%. Nasdaq 100 contracts rose more than 1%. S&P 500 futures also went up signaling a possible extension of the rebound. The S&P 500 recovered its May losses putting an end to seven consecutive weeks of declines. European contracts also advanced.

Latest Forex Updates

The yuan – the Chinese currency – climbed after news of the nation’s fewer Covid-19 cases and the easing of virus controls in Beijing and Shanghai. The US dollar fell for a third consecutive day against other major currencies and was close to five-week lows, as the appeal of safe-haven assets has been hurt by the improved investors’ sentiment. The price of the US currency may have also been driven down by hints that the Fed could potentially ease its monetary tightening after aggressive hikes in June and July. The Japanese yen also declined, while the euro climbed due to comments from European Central Bank (ECB) officials signaling a rate hike as early as July.

US NFP

Investors will be expecting the release of the US non-farm payroll figures this Friday. The numbers could give indications as to the Fed’s next tightening policy moves in its attempts to contain inflation.

European Market News

In Europe, German and Spanish consumer inflation data are due today. On Tuesday, the latest Eurozone inflation flash estimate is scheduled to be released. Economists expect the CPI (Consumer Price Index) to reach 7.7% from April’s 7.4% and hit another record. A high figure up to 7.7% would reinforce expectations of tighter monetary policy by the ECB. The Eurozone business and consumer sentiment survey data for May are also slated to be released today, Monday. It is expected that the data will reveal weakened confidence as the prices keep going up and the war in Ukraine has not stopped.

Oil Prices Today

In oil news, oil prices soared today, Monday. The “black gold” is trading around two-month highs before a two-day meeting of EU countries to discuss sanctions against Russia for its invasion of Ukraine. The banning of Russian oil seaborne deliveries is expected to be on the agenda.

What to Watch out for this Week:

Monday
US Markets Closed

Tuesday
EU two-day meeting
China PMI
Eurozone CPI

Wednesday
Fed to start reducing its balance sheet
Fed’s Beige Book report released
New York Fed President & St. Louis Fed President’s speeches
OPEC+ virtual meeting

Thursday
Cleveland Fed President’s talk on economic outlook

Friday
US May employment report (including the NFP)
Monthly Food price index (FFPI) by the UN’s Food and Agriculture Organization