Attention-grabbing U.S. employment data release! "Key points and event schedule for May 8"
Today we have the highly anticipated employment statistics.
I expect results to be quite poor.
That alone suggests the U.S. economy is weak, and there are rumors that the Fed may introduce negative interest rates.
From the rumors of negative rates, stock prices have held firm, bond yields have fallen, and the dollar has been sold.
Depending on today’s employment data results, the rumors of negative interest rate introduction may spread.
◎ Today’s Points of Focus
1) U.S. Employment Statistics
Today’s employment data release reflects employment statistics since initial unemployment claims began recording figures at an unprecedented scale.
Non-farm payrolls are expected to be minus 22 million, and the unemployment rate is forecast at 16%, but some say the worst could be minus 35 million or minus 50 million.
The unemployment rate may also reach 20% in some estimates.
Forecasts are vary widely, making it hard to predict market reaction even after the release.
That is how much attention this is drawing.
Because there is a potential for volatility, caution is required.
2) Euro Area
Recently, the dispute between the ECB and Germany has been contributing to euro-area instability.
The ECB is communicating the legitimacy of its monetary policy.
Today, President Lagarde is also scheduled to speak.
Watch closely to see whether this could lead to greater division within the euro area.
3) U.S.-China Relations
The economy is stalling due to the coronavirus, with signs of a worsening economy and large numbers of infections and deaths in the United States, where a presidential election is due this November.
President Trump, whose support has fallen due to the coronavirus, is trying to place blame on China.
He is also attempting to gain support by creating an adversary and attacking it.
Until now, re-election seemed likely, but with falling approval ratings, the possibility of defeat is now present.
Because of this, criticism of China may become more aggressive, and there is a high likelihood of weekend developments, so be careful.
4) Turkish Lira
Turkey’s foreign exchange reserves have been a concern, and the Turkish lira has been selling off and hitting new lows.
Yesterday, Turkish authorities reportedly ordered a halt to trading of the lira with Citi, UBS, and BNP Paribas.
Whether this caused the rebound or there was intervention is unclear, but the lira has sharply recovered to around 15 per dollar.
Additionally, OANDA has halted new orders for the Turkish lira.
Other brokers have also adjusted margin requirements, among other measures.
It feels like the end for the Turkish lira may have begun.
There is attention on whether an emerging market currency crisis could occur.
5) Crude Oil Prices
Yesterday, Saudi Arabia raised the value of crude oil transactions, which temporarily pushed oil prices higher.
Whether other countries will agree to supply cuts and other factors are needed for price increases.
Also, there are expectations for increased demand as economic activity resumes.
If employment data and other reports show positive results, a recovery in the economy is anticipated, boosting oil demand and driving oil prices higher, so this is worth watching closely.
◎ Today’s Economic Event Schedule
Friday, May 8
10:30 AUDRBA Monetary Policy Report
20:00 EURLagarde ECB President Remarks
21:30 USDNFP Employment Report, Average Hourly Earnings, Unemployment Rate
21:30 CADCanada Employment Change and Unemployment Rate
Saturday, May 9
02:00 USD Baker Hughes Rig Count
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