Weekly Market Analysis: May 31 - June 04, 2021 High Covid-19 Cases

This weekly market analysis for May 31 - June 4, 2021 outlines several things that affect market movements. The current condition of the US Dollar is very concerning and is at its lowest level. The weakening of the US Dollar is due to the physical selling of the American currency by market players. The actions of these market players are the result of the release of negative US inflation data, in addition to the end of the month and the weekend holidays. The focus of market players this week is the release of NFP data and unemployment data. On the other hand, one of the Fed officials has said that the current level of economic growth has shown a significant increase. This can stimulate the US Central Bank's decision-making to reduce bond purchases and even evaluate the current interest rate. If this can be realized, it is certain that the value of the US Dollar will strengthen compared to other major currencies. GBPUSD is expected to continue to weaken for the Pound Sterling. The weakening of the Pound against the US Dollar was caused by the ongoing fear of a spike in new types of Covid-19 sufferers in the UK. For today's market movement, GBPUSD is predicted to continue to weaken compared to the US Dollar. EURUSD had strengthened compared to the US Dollar, in the market movement on Friday at the end of last week. The strengthening of the Euro was the impact of the release of positive economic data. The data is the increasing Consumer Sentiment, thus giving market players confidence in the increasing economy in the European region. However, for today's market movement, EURUSD is predicted to weaken for the Euro. AUDUSD moved weaker, the weakening of the Australian Dollar compared to the US Dollar was the impact of the falling price of Australian commodities, especially iron ore. In addition to the falling price of these commodities, the strengthening of the US Dollar also weakened the Aussie. For today's market movement, the Aussie is predicted to continue to weaken. Meanwhile, USDJPY moved weaker for the Yen compared to the US Dollar. The weakening of the Yen was the impact of the optimistic attitude of market players regarding the rapid recovery of the US economy, thus causing the strengthening of the US Dollar. For today, the Yen is expected to continue to weaken compared to the US Dollar. The increasing number of Covid-19 sufferers in several countries in the world has raised concerns about the demand for Fuel Oil. These concerns have caused Oil prices to decline in trading last Friday. For today's market movement, Oil prices are predicted to continue to decline. Gold is shining even brighter due to market players' concerns about a spike in Covid-19 sufferers in several countries in the world. The increase in Gold prices has moved and reached levels above $ 1900 / troy ounce. In addition to the surge in Covid-19 sufferers in several countries in the world, the cause of the increase in Gold prices is also supported by the weakening US Dollar. The increase in Gold prices was also driven by the release of poor US economic data, where the data concerns inflation. In addition to the causes of the increase in Gold prices as described above, another factor is the decline in US government bond yields for long-term or 10-year tenors. As we know, if market conditions are uncertain or unstable, safe haven assets will become a shift in investment for market players. Safe haven assets Gold is currently being targeted by market players and sidelining other safe haven assets. These are the factors of the weekly market analysis for May 31 - June 04, 2021 in general that can affect market movements.

1. Important Data/High Impact Weekly Market Analysis

1.1 RBA Rate Statement & Cash Rate (AUD)

Tuesday, 11:30 WIB. The Reserve Bank of Australia (RBA) at its meeting later, plans to maintain interest rates at 0.10%. If the RBA is as predicted above, the Aussie will move to strengthen against the US Dollar if the currency of the superpower country continues to weaken. Cash Rate, after the interest rate decision that will be released in the market, tends to be overshadowed by the RBA Interest Rate Statement (Cash Rate), which focuses on future policies. Short-term interest rates are the most important factor in impacting the Australian currency. Market players view and prepare for the impacts caused and predict how interest rates will change or not in the future.

1.2 OPEC - JMMC Meetings (All)

Tuesday, Tentative. The definition of JMMC Meetings data" means that the OPEC-JMMC Meeting is attended by representatives from 13 OPEC members and 11 other oil-rich countries. They discuss various issues about the energy market, most importantly in this meeting will agree on how much oil they will produce. The meeting is closed to the press but officials usually speak with reporters throughout the day, and an official statement covering policy changes and the meeting's goals is released after the meeting is over. The agenda for this meeting was originally in January 2017.

1.3 ISM Manufacturing PMI (USD)

Tuesday, 21:00 WIB. ISM Manufacturing PMI is the same index released by Market for Manufacturing PMI, but the data is sourced and created by the Institute for Supply Management (ISM) which is specifically created for the US. This indicator will usually have a greater impact than the one released by Market. Just info This index is created based on a survey of around 400 purchasing managers in the US, regarding current business conditions and situations, including production output, product availability, shipping activity, number of orders, and number of workers or employees. If the release is above 50.0 then it reflects expansion in the manufacturing sector, but if it is below 50.0 it indicates contraction.

1.4 BOE Gov. Bailey Speaks (GBP)

Tuesday, 10 p.m. WIB. As head of the central bank, which controls short-term interest rates, he has more influence over the value of the country's currency than anyone else. Traders watch his public engagements because they often provide subtle hints about future monetary policy.

1.5 GDP (AUD)

Wednesday, 08:30 WIB. It is data that measures changes in the value adjusted for the inflation rate of all goods and services produced by a country. This data is also the largest benchmark for economic activity to see whether a country's economy is healthy or not. This data is released every 3 months, approximately 65 days after the quarter ends.

1.6 ISM Services PMI (USD)

Thursday, 21:00 WIB. This data is a leading indicator of a country's economic health, as businesses react quickly to market conditions, and their purchasing managers may have up-to-date and relevant insights into the company's outlook on the country's economy. This data measures the level of the diffusion index based on purchasing managers surveyed in the service sector and excluding the manufacturing sector. The survey of about 300 purchasing managers asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. A reading above 50.0 indicates industry expansion, below 50.0 indicates contraction. The source changed the series from unadjusted to seasonally adjusted in January 2001.

1.7 Fed Chair Powell Speaks (USD)

Friday, 18:00 WIB. Powell as Chairman of the US Central Bank, who served from February 2018 - February 2022. His duties include controlling short-term interest rates. In addition, he also has a greater influence on the strengthening or weakening of the US currency than anyone else. Investors are eagerly awaiting the central bank's statement which is useful for providing subtle clues about future monetary policy.

1.8 Employment Change & Unemployment Rate (CAD)

Friday, 19:30 WIB. Employment Change is data on job creation that is an important leading indicator of consumer spending, which accounts for the majority of overall economic activity. This data contains the Change in the number of people employed during the previous month. This is important economic data that is released shortly after the month ends. The combination of importance and clarity produces a large and powerful market impact. Unemployment Rate is data on the unemployment rate in a month. Although generally viewed as a lagging indicator, the unemployment rate is an important signal of overall economic health because consumer spending is highly correlated with labor market conditions.

1.9 Average Hourly Earnings, Non-Farm Employment Change & Unemployment Rate (USD)

Friday, 19:30 WIB. Average Hourly Earnings is an indicator of the inflation rate derived from the amount of hourly wages paid by employers outside the agricultural sector. If the value of the Average Hourly Earnings of the United States (US) is good or increases, the US Dollar will strengthen, and vice versa. Non-Farm Employment Change is data that measures the level of new jobs outside the agricultural sector. What is the relationship between Average Hourly Earnings and Non-Farm Employment Change? NFP data and Average Earnings data are related and influence each other, but NFP data has a greater impact on market movements. Average earnings are the percentage change in hourly wages. If the NFP is good but the Average Hourly Earnings fall, the US Dollar may still strengthen, because there is a prediction that in the following month the Earnings will be good followed by an increase in the number of workers. Conversely, if the NFP is bad, the USD will tend to weaken even though the Earnings are good. Unemployment Rate is data that measures the monthly unemployment rate in the US. Last month the unemployment rate was released at 6.1% and is predicted to drop to 5.9% in May. If it is released according to or even below the prediction, the US Dollar will strengthen, and vice versa.

2. Technical Review According to Weekly Market Analysis 31 May - 04 June 2021

2.1 EUR/USD

2.2 USDCHF

2.3 GBPUSD

2.4 USDJPY

2.5 Gold

2.6 AUDUSD

2.7 Oil

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