The previous week ended with mixed dynamics for global markets. Stock indices showed multi-directional movements, and the US dollar continued to consolidate relative to major currency pairs in the currency market.
The closer the summer is, the more noticeably the activity of market participants begins to fall, which, on the one hand, is associated with the beginning of summer vacations, and on the other hand, with the lack of any clear reasons for the continued growth of demand for risky assets and their sales.
In the United States, the topic of the need for financial support for the country's population is being raised, which stimulates inflation growth. But at the same time, a significant part of Americans who previously worked in low-paid jobs prefer to stay at home, receiving benefits. The employment data presented earlier clearly demonstrate this. In the local labor market, there is a retracement in the desire of workers to look for new jobs, while receiving benefits that allow them to live. It seems that it is indeed before the coronavirus pandemic that low-wage workers are now choosing not to work.
In fact, this is a very bad signal for the US economy, as it shows all the abuse of "easy" money in the form of benefits, which simply corrupts the population.
However, there is no information yet whether the Biden-Harris administration will take any action in this regard. Investors understand all the damage of this "easy" money system for the economy, which simply ruins it, but they have not dared to do anything. This is still due to the significant support and incentive measures that rule not only in the States.
Analyzing the current situation, we believe that the preservation of the status quo in America as a whole will stimulate the overall sideways dynamics in the global stock markets with some local surges and the same declines. A similar picture will be observed in the commodity and currency markets. Traders will be looking forward to the latest data on the US economy first. As early as next week, the publication of the US employment data for May will attract attention. In our opinion, this will be the main data for the markets, which can surprise it at least for a while.
Forecast of the day:
The EUR/USD pair remains in a short-term upward trend. The pair is holding above the level of 1.2160. If it continues to do so, we should expect new local growth to the level of 1.2240.
The GBP/USD remains in a short-term upward trend. The pair is holding above the level of 1.4130. If it further rises to 1.4165, we can expect the local high at 1.4225 to be retested.
