Investment Bank Outlook: 03-06-2021
RBC Capital Markets
Overnight: USD is drifting higher overnight though well within yesterday’s ranges. Markets are generally calm ahead of tomorrow’s all-important payrolls. In China, the Caixin services PMI came in a touch weaker than expected, still pointing to expansion but at a relatively steady pace over the past year. Japanese weekly capital flows data showed another week of sizeable foreign bond selling (JPY1trn).
Day ahead: In the US, ADP employment change, weekly jobless claims, and the ISM services index are out ahead of tomorrow’s payrolls. The Euro area and the UK publish the final services PMI prints, while Turkey releases May CPI. There are also a range of central bank speakers from the Fed (Bostic, Quarles, Kaplan, Harker) and BoE (Bailey). CAD: The potential double bottom that has just formed at 1.2013 serves as key support in USD/CAD now, with resistance located at 1.2121.
Citi
Broader risk sentiment still appears to be fairly neutral as market participants await Friday’s US NFP report. The USD continues to see a slight bias as market participants reduce risk with EURUSD flirting with 1.22 and the Antipodeans heading towards yesterday’s lows.
Elsewhere, sentiment seems well. While US equity futures are close to flat, Asian equities resumed higher with Topix rallying as much as 1.2%. Meanwhile, China equity indexes held up well despite headlines that US plans to amend its list of Chinese military-linked blacklisted companies in the defense and surveillance technology sectors. The amended order is expected to be signed by Biden later this week but should be seen more as a tweak.
Looking ahead, ADP may get more attention than usual though it’s correlation with NFP has broken down. For this morning, we have final Markit PMI prints for Europe, which are not expected to change significantly from the preliminary prints. We also have an all important inflation print for TRY. Local markets will be closed in THB, PLN, UGX, and BRLfor holidays
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
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High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.