6.4 Employment statistics are kept in reserve as we organize our environmental awareness

※This article is not intended to indicate or recommend buying or selling timing.

Please make your own investment decisions.

Today’s article analyzes how the market is likely to behave after reviewing yesterday and following the release of today’s employment statistics.

Clarification of assumptions

✓ Market theme

→ Concerns about inflation and tapering

✓ Economic environment

→ The US economy is progressing well with vaccination,5 months in which many Covid regulations have been relaxed, with particularly strong recovery in services.

✓ Last month’s employment statistics100 thousand more than expected,26.6 thousand

→ Although it is a quarter-end and seasonally adjusted, and needs to be taken with caution, as shown by recent economic indicators, there are many job openings but a shortage of workers making it difficult to fill positions.

✓ Fed posture

→ The Fed has raised the threshold for tapering to confirm improvements in the employment environment, and persistent inflation.

✓ Market expectations

→ Following the sharp rise in the latest CPI and PCE deflator, there is talk that tapering might be mentioned at the mid-June FOMC meeting.

Prelude: reaction to the ADP employment report ADP employment data

Since there are many individual stocks, the excerpt focuses on the ADP employment data yesterday; rather than hedging risk, there was a cautious stance with a decrease in risk positions. This suggests risk-off behavior.

In an environment where investment sentiment is improving, it is typical for stock positions to adjust and for funds to flow into safe assets; however, in the broader commodity market, including copper, there is also a cash-out flow that pushes up dollar assets. This is pushing up dollar-denominated assets.

Readers who have followed the same pattern as last week may find this resonates.