11.06.2024: Economics determines financial coverage. Intraday outlook for S&P 500, EUR/USD, Brent
These days, economic data is setting the tone for policy decisions of financial regulators. For example, before the Federal Reserve decides on the funds rate, a crucial report on inflation for May will be available in the US.Although the US central bank is poised to remain cautious, markets usually price in new macroeconomic reports. That is, investors are trying to predict the future. Earlier, a bunch of Fed policymakers repeatedly warned that they want to see steady disinflation in the US.
In other words, the decline in consumer prices should go down for several months in a row. If the inflation dynamic plots amplitudes, monetary policymakers are not happy with this development. Moreover, there is no urgent need to cut interest rates in the US. The latest nonfarm payrolls showed unexpectedly strong employment growth.
The annual wage growth caught investors off-guard. Average hourly earnings jumped by 4.1% in May. The previous figure was also upgraded to +4%.
The consensus suggested wage growth to be only 3.9% in May. That is, a healthy labor market indicates a stable economy. High wages cannot serve as a barometer for the sustainable deflation that the US Federal Reserve is anticipating.
Therefore, the global currency market today actually stands still. The US dollar index is trading sideways today within an intraday corridor of 105.1 to 105.3 on early Tuesday.
After reaching a 4-week high in the previous session, the greenback, by inertia, strengthened a little more. However, by the end of Monday, its index was exactly where it was at the beginning of the new trading week. No wonder. Traders want to play safe ahead of tomorrow, which will be incredibly eventful.
However, the US dollar rose to a one-month high against the euro as far-right parties notched a success in the European Parliament elections. This outcome has not only worsened political uncertainty in the EU but also raised concerns about the economic prospects of the eurozone as a whole.
So, the single currency had to work out this unfavorable scenario yesterday. After yesterday’s blow, today the euro/dollar pair stands still. The single currency followed an inertial downward impulse in the range of 1.0743 to 1.0777. As a result, the euro not only sank 1.074 against the greenback, but it became oversold.
Thus, the euro/dollar pair is having a technical pullback today. According to our analysts, this move could give way to temporary consolidation and set the stage for a new round of trading activity. But if the pullback continues to develop, the resistance level for buyers will be 1.08.
Oil prices yesterday climbed above 80 dollars per barrel. Apparently, this growth was purely temporary. The commodity market is also anticipating tomorrow’s policy meeting of the Federal Reserve. Investors are interested not in the policy decision, but in the following press conference of Jerome Powell.
After all, there is a risk of another rate hike in the US. This scenario is certainly bearish for the oil market. At the same time, inflation data which is due tomorrow in the US also carries the threat of a further decline in oil prices.
Therefore, today, Brent futures, during a correction, locally reached 82 dollars per barrel. As a result, some sellers also left the market and the bullish cycle was interrupted. To resume growth, the bulls need price stabilization above 82 on the daily timeframe. Otherwise, the Brent price may gradually decline below 80 dollars a barrel.
You have watched a review of global financial markets for today, June 11. Keep close tabs on markets on InstaForex TV channel! Feel free to leave your comments! Our experts are always ready to answer your questions. Thank you for watching and see you online tomorrow!
00:38 U.S. ECONOMY AND THE FED FUNDS RATE
01:04 AVERAGE HOURLY EARNINGS IN THE U.S.
01:40 USDX
02:22 EUR/USD
03:34 BRENT
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