NFP data is slated to be released today and it could determine the Fed’s direction regarding interest rates. The International Monetary Fund has indicated that the US central bank is likely to begin tapering stimulus in the first half of 2022 and begin raising interest rates later in the year.
Yesterday, in the US trading session, the 10-year bonds were unchanged ahead of NFP, the dollar continued to rally, the S&P 500 held steady after posting its longest streak of gains since February, and the Nasdaq retreated on the same day that Biden’s administration won international support for a global minimum tax rate which could mainly affect tech companies. Crude oil was back above $75 a barrel returning to 2018 highs, following an OPEC+ meeting during which disagreements among the members may have jeopardized a deal that could slow the price rally.
Bitcoin was trading around $32,900 after a busy week for cryptos. The billionaire owner of Mexico’s Banco Azteca, Eduardo Salinas announced that his bank will be accepting the digital asset as legal tender and caused the digital asset to rise 3% and trade over $35,000 on Sunday. The UK banned Binance from operating across the country on Tuesday, and Mexican authorities reminded Salinas that Mexico’s financial institutions banned crypto-assets trading. So far this year, Bitcoin is up 23%. However, one after another, regulators and central banks close the gate on Bitcoin and cryptocurrencies. Which country is next?
The NFP is out today
Today, the NFP data is being released. US non-farm payrolls are a clear indicator of how the US economy is performing. Many states have begun to withdraw pandemic unemployment benefits, so many citizens are returning to work. The May figure reflected the creation of 559,000 jobs while the NFP forecast for June is around 700,000 (700K). The release of the NFP data is likely to generate volatility in the markets before and after its release.
Jobless Claims data
Yesterday, the US Labor Department released its jobless claims data. The data showed 364,000 claims and reflected a drop of 51,000 claims from the previous release. The data reflects a gradual decline in claims but remains above pre-pandemic levels.
The labor market is approximately 6.6 million jobs short of its pre-pandemic levels despite the reduction in jobless claims and the high NFP forecast.
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