The ECB will raise rates until the end of the summer. A deal to raise the US debt ceiling has been approved in Congress

By JustMarkets

At the close of the stock market yesterday, the Dow Jones Index (US30) increased by 1.21%, and the S&P500 Index (US500) closed higher by 0.99%. The NASDAQ Technology Index (US100) jumped by 0.63% on Thursday. ADP private sector employment data in the US pleased a job growth of 278,000 (higher than expected), but wage growth is gradually slowing down. With the number of new jobless claims up slightly last week, the labor market remains resilient, which may encourage the Fed to keep raising rates. The focus now shifts to the Labor Department’s unemployment report for May (Nonfarm Payrolls), which will be published today. The data will help determine whether the Fed will stick with an aggressive rate hike. The better the data comes out, the more likely a rate hike will be in June. A rate hike is positive for the dollar and negative for indices and gold, and vice versa.

Federal Reserve Bank of Philadelphia President Patrick Harker said the US Central Bank is close to the point where it can stop raising interest rates and move to hold them at current levels in an effort to lower inflation even further. The head of the Philadelphia Fed repeated comments yesterday that he favors not raising rates at the June meeting, even if officials then have to raise them again at later meetings.

Stock markets in Europe were mostly up Wednesday. German DAX (DE30) gained 1.21% yesterday, French CAC 40 (FR40) added 0.55%, Spanish IBEX 35 (ES35) increased by 1.54%, British FTSE 100 (UK100) gained 0.59% on the day.

The ECB’s May monetary policy report confirmed that the central bank remains concerned about the risks of rising inflation, and despite slowing inflationary pressures, it was deemed necessary to emphasize that rate hikes will continue in the future. The key challenge for the ECB is to properly calibrate monetary policy in order to return inflation to target levels in time without unduly harming the economy.

Crude oil prices jumped more than 3% on Thursday, offsetting losses of 7% from the previous three trading days, as oil traders expect OPEC+ to announce another production cut at its meeting this weekend. That was one reason oil prices rebounded later in the week, despite a depressing weekly report on oil supply and demand released by the US government.

Asian markets traded yesterday without a single dynamic. Japan’s Nikkei 225 (JP225) gained 0.84% over the day, China’s FTSE China A50 (CHA50) added 0.42%, Hong Kong’s Hang Seng (HK50) ended Thursday down 0.10%, India’s NIFTY 50 (IND50) lost 0.25%, and Australia’s S&P/ASX 200 (AU200) ended the day with a 0.27% gain.

Most Asian stock markets rose on Friday amid optimism over the approval of a deal to raise the US debt ceiling and prevent a default, while Chinese markets are recovering from six-month lows amid renewed hopes for economic recovery in the country.

S&P 500 (F) (US500) 4,221.02 +41.19 (+0.99%)

Dow Jones (US30)33,061.57 +153.30 (+0.47%)

DAX (DE40) 15,853.66 +189.64 (+1.21%)

FTSE 100 (UK100) 7,490.27 +44.13 (+0.59%)

USD Index 103.56 -0.77 (-0.74%)

• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
• – US Unemployment Rate (m/m) at 15:30 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.