The inflation data reduced investors’ concerns. The Federal Reserve is likely to leave monetary policy unchanged

The inflation growth in the United States up to 5% in annual terms was insufficient to change the monetary policy by the Fed. Monthly dynamics showed a slowdown in inflation growth. The number of new jobless claims also reported its lowest level in the last 15 months. Considering this statistics, the US stock indices rose to new highs. The S&P 500 Index increased by 0.47% to a new all-time high. The Dow Jones Index added 0.06% and the Nasdaq Composite Index jumped by 0.78%. Companies in the healthcare sector were the leaders.

The European Central Bank left interest rates unchanged. Considering the increasing vaccination rate in Europe, and against the background of the lifting of restrictions after the pandemic, the economic climate in the Eurozone will be improving, which plays in favor of strengthening the euro, the British pound and the Swiss franc. However, the European stock indices closed with multidirectional results on Thursday.

Gold and silver futures increased sharply on inflation news. Treasury yields fell to a three-month low, so with the weakness of the dollar index, precious metals remain in an uptrend. Mining stock companies are at good buying points now.

The price of WTI crude oil fell sharply below $70 at the opening of the US trading session, but it recovered by the end of the trading day. In China, the US and Europe, an increase in the demand for fuel ahead of the summer season is expected, so a significant drop in oil prices is unlikely to be expected. The bullish trend in natural gas is maintained.

The broadest index of Asia-Pacific shares outside Japan, the MSCI, increased by 0.18% at the opening trading in Asia. But Japan's Nikkei lost its previous position and fell by 0.11%. The Japanese economy is having hard times, which also affects the national currency. Chinese index CSI300 also declined on Thursday amid falling shares of companies producing essential commodities.

Main market quotes:

S&P 500 (F) 4,239.18 +19.63 (+0.47%)

Dow Jones 34,466.24 +19.10 (+0.06%)

DAX 15,571.22 -9.92 (-0.06%)

FTSE 100 7,088.18 +7.17 (+0.10%)

USD Index 90.07 -0.06 (-0.06%)

Important events:
  • – New Zealand Business Manufacturing Index (m/m) at 01:30 (GMT+3);
  • – Japan BSI Manufacturing Index (m/m) at 02:50 (GMT+3);
  • – UK Gross Domestic Product (q/q) at 09:00 (GMT+3);
  • – UK Industrial Production (m/m) at 09:00 (GMT+3);
  • – UK Manufacturing Production (m/m) at 09:00 (GMT+3);
  • – UK Trade Balance (m/m) at 09:00 (GMT+3);
  • – UK BOE Governor Andrew Bailey Speaks at 11:30 (GMT+3);
  • – US Prelim UoM Consumer Sentiment (m/m) at 17:00 (GMT+3).

by Justforex, 2021.06.11

We advise you to get acquainted with the daily forecasts for the major currency pairs.

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.

Open Account

Get Free Analytics

* required fields