By IFCMarkets

US stocks continued edging higher on Friday. The US dollar index also rose on strong economic data and speech of the Fed President Janet Yellen. The second reading of US Q1 GDP came out at 0.8% up from the previous 0.5%. The Fed Chair noted the rates may be hiked soon in case the positive trend on the labour market persists. The May data will come out on Friday, June 3. The outlook for Non-farm Payrolls is neutral at 160 thousand as in April. This may stop the growth of financial markets. Previously S&P 500 and Dow stock market indices showed a record weekly increase of above 2% since this March and Nasdaq since February. According to the Fed Funds futures, the chances for the Fed rate hike on June 15 are 34% now and 59% for July meeting. Two weeks ago the markets estimated the chances for the rate hike at just 4%. The US markets will be closed on Monday due to the Memorial Day.

European stocks were almost flat on Monday amid weak trading as US and UK markets were closed. The UK market is closed due to the spring Bank holidays. The trading volume in the European eachanges was almost one third of monthly average. In some European countries the strong economic data came out. The Germany ended may without deflation. Last week the pan-European Stoxx Europe 600 showed a record increase since February like US Nasdaq. The ECB meeting is due on Thursday which may affect the euro despite no change in interest rates in anticipated.

Nikkei rose on Monday for the 5th straight day on weaker yen. The additional positive was the data that retail sales fell in April less than expected. The Japan’s prime minister Shinzo Abe said the sales tax hike planned on April 2017 may be postponed. Moreover, he does not exclude the further monetary stimulus of the Japanese economy. The UBS Group and Nomura Holdings investment banks revised up their forecast for Nissan Motor stocks which pushed them up by 3.8%. This had a positive effect on other Japanese carmakers. On Tuesday at 1:30 СЕSТ the unemployment and industrial production data for April will come out in Japan. We believe the tentative outlook is negative which may further push the yen down.

Global oil prices slightly edged down ahead of next OPEC meeting due on Thursday, June 2. The active US oil rigs count fell to 319 which is less than 20% of the high of 1609 hit in October 2014. AS a result, the share of US oil fell in the global market as other countries occupied it. In particular, Iran said it was planning to raise oil output in June by 5mln barrels from current 3.47mln barrels a day. Saudi Arabia, Canada, Libya and Nigeria are also planning to raise oil production. The JBC Energy Agency believes the global demand in January-April rose by 1.5mln barrels a day. This may support the prices and form the sideways channel of oil fluctuations.

Gold and other precious metals edged lower amid stronger US dollar. As a rule, their prices are negatively correlated. Gold has been retreating for 9 trading days in a row which is its longest incessant fall since March 2015.

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