Non-farm payrolls data exceeded expectations, weakening the possibility of the Fed suspending interest rate hikes! US CPI released this week

Based on the following articles, we can draw the following trading recommendations:

– The strong performance of the U.S. economy, with employment and inflation data exceeding expectations, could push the Fed rate hike expectations forward, favoring the U.S. dollar to the detriment of gold and other non-U.S. currencies. It is recommended to increase long positions in the US dollar and reduce short positions in gold and the euro etc. as appropriate.

– The ECB’s hawkish rhetoric has increased and may suggest future tightening of monetary policy, favoring the euro and disadvantaging the dollar. It is recommended to pay attention to the ECB’s policy moves, buy the euro on the low and sell the dollar on the high.

– The Bank of England raised interest rates with a probability of up to 70% to deal with high inflation. Favorable to the pound, unfavorable to the dollar. Suggest to pay attention to the Bank of England’s rate meeting, buy the pound on the low and sell the dollar on the high.

– Chinese economic data is likely to be weak, with trade and inflation data likely to fall short of expectations. Negative for the RMB and HKD, positive for the USD. Recommend increasing short positions in RMB and HKD and reducing long positions in USD as appropriate.

– U.S. stocks rallied strongly, led by technology and banking stocks. Favorable to NASDAQ and S&P 500, unfavorable to Dow. It is recommended to increase long positions in the Nasdaq and S&P 500 and reduce short positions in the Dow as appropriate.

– European stocks also rebounded, with oil and gas stocks and banking stocks outperforming. The pan-European Stoxx 600 and the German DAX 30 were favorable, while the French CAC 40 and the UK FTSE 100 were unfavorable. It is recommended to increase long positions in the pan-European Stoxx 600 and German DAX 30 and reduce short positions in the French CAC 40 and UK FTSE 100 as appropriate.

– Asian equities were muted, with A-shares and Hong Kong stocks falling slightly. Negative for SSE and Hang Seng Index, positive for Hang Seng China Enterprises Index and Hang Seng Technology Index. It is recommended to increase long positions in the Hang Seng China Enterprises Index and Hang Seng Technology Index and reduce short positions in the SSE and Hang Seng Indices as appropriate.

– In the commodity markets, oil prices rebounded and natural gas fell. Favorable for WTI crude oil and Brent crude oil, unfavorable for natural gas. It is recommended to increase long positions in WTI crude oil and Brent crude oil and reduce short positions in natural gas as appropriate.

– Bitcoin prices rose slightly, but remain volatile at high levels. Risks are high and caution is advised to set up stop-loss and take-profit points.

The original article is as follows:

On Friday, according to the Labor Department, U.S. nonfarm payrolls added 253,000 workers in April, beating economists’ forecasts of 180,000. Hourly wages increased at an annual rate of 4.4%, also higher than expected, and the unemployment rate fell to 3.4% from 3.5%.

Looking ahead to this week, the primary focus of the market is the U.S. Consumer Price Index (CPI) for April released on Wednesday, the data is expected to have an important reference role for the Reserve Board in June interest rate discussions.

Market participants estimate that the U.S. CPI in April rose 0.4% month-on-month, further reflecting the slowdown in inflationary pressure, giving the Federal Reserve Board more reason to suspend interest rate hikes in June. If the data is stronger than expected, the market will speculate that the Federal Reserve may still raise interest rates again.

In addition, also need to pay attention to, China’s trade and inflation data in April. The Bank of England will also hold a rate meeting on Thursday, the central bank is currently raising interest rates to 4.5% of the probability is 70%, in order to deal with high inflation.

European and U.S. stock markets

U.S. employment data is ideal, easing market worries about the recession, coupled with a big rebound in bank stocks, U.S. stocks bounced up significantly on Friday.

By the close of trading, the Dow Jones Industrial Average was at 33,674 points, up 546 points or 1.65%; the U.S. Standard & Poor’s 500 Index rose 1.85% to 4,136 points; the Nasdaq Composite Index rose 2.25% to 12,235 points. Last week cumulatively, the Dow inserted 1.24%, the S&P retreated 0.8, the Nasdaq rose slightly by 0.07%.

Specifically, the SPDR S&P Regional Banking ETF rallied 6.29% on Friday, after a cumulative decline of up to 16 % for the week.

In addition, Apple closed 4.69% in the red to $173.57 per share, its best one-day performance in five months. Apple announced after-hours results for its fiscal second quarter on Thursday, with revenue of $94.836 billion, adjusted earnings per share of $1.52 and gross margin of 44.3%, all better than expected, and also announced a $90 billion treasury stock program.

In Europe, the pan-European Stock Exchange 600 index closed rebounded 1.08% to 465 points, the highest level of the day; oil and gas stocks jumped 2.74%, banking stocks surged 2.92%; Germany’s DAX 30 index closed at 15,961 points, up 1.44% or 226 points; France’s CAC 40 index closed at 7,432 points, climbing 1.26% or 92 points; the FTSE 100 index closed at 7778 points, up 0.98% or 75 points.

Asian Stock Markets

On Friday, the Shanghai Stock Exchange Index closed at 3,334 points, down 15 points or 0.48%, with a turnover of 499.294 billion yuan; the Shenzhen Stock Exchange Index closed at 11,180 points, down 92 points or 0.82%, with a turnover of 571.855 billion yuan; the Growth Enterprise Market Index closed at 2,267 points, down 30 points or 1.31%.

As for Hong Kong stocks, Hong Kong Hang Seng Index closed at 20,049 points, up 100 points or 0.5%; Hang Seng China Enterprises Index closed at 6,797 points, up 78 points or 1.2%; Hang Seng Technology Index rose 1% to close at 3,895 points. Also need to pay attention to, the HSI night market futures index closed at 20,134 points, up 150 points, compared with yesterday’s HSI closing 20,049 points, 85 points higher, with a turnover of 12,716.

Commodity Market

Oil prices climbed after the U.S. Labor Department released its employment report on Friday. Crude oil futures prices rose on Friday (5), with WTI crude closing higher for the first time in five sessions, but fell a total of about 7% last week due to concerns about the economic outlook.

Specifically, WTI crude futures prices rose $2.78, or nearly 4.1%, to close at $71.34 per barrel, after the most recent month of WTI crude fell 7.1% last week. London Brent crude futures prices for July delivery rose $2.80, or 3.9%, to close at $75.30 per barrel, after the most recent month of Brent crude fell 6.3% last week.

Natural gas futures rose 1.7 percent to close at $2.14 per million Btu, after plunging 11.3 percent last week. The U.S. Energy Information Administration (EIA) reported Thursday that U.S. domestic natural gas supplies rose 54 billion cubic feet last week (ended 4/28), roughly in line with expectations. According to S&P Global Commodity Insights survey, analysts on average expected last week’s natural gas supply increased 52 billion cubic feet.

In the gold market, gold prices rose on Friday because of the non-farm payrolls report and quickly reversed, the data showed that U.S. employers not only hired additional staff, but also raised salaries. New York futures gold prices fell $30.90, or 1.5%, to $2,024.80 an ounce, sliding from the previous day’s highest price since Aug. 6, 2020.

Foreign exchange market

In the currency markets, the dollar has retreated from a 20-year high touched last September as investors adjust their expectations for a Fed rate hike cycle, coupled with an increasingly hawkish European Central Bank (ECB). The dollar index slipped 0.13% to 101.19, softening from the 101.77 it rose to earlier in the session.

Note that the euro depreciated to 1.0967 against the dollar at one point, but then recovered to 1.1026, up about 0.11%. The pound depreciated to 87.11 pence against the dollar, the lowest since Dec. 20 last year.

The dollar rose 0.4% against the yen to 134.79.

Finally, bitcoin rose as much as 3.18% to nearly $29,700.


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