US dollar higher; crude oil advances

There are a lot of economic events taking place in Brussels today. Throughout the day, the European Commission’s annual Brussels Economic Forum will take place where several ECB and EU officials will talk about recent events. They are expected to avoid talking about unwinding the Bank’s special measures particularly due to yesterday’s weak CPI figure.

Today is the anticipated release of the final Markit PMIs for the major Eurozone economies as well as other countries; usually, these revisions, don’t have any significant effects on the market. However, the UK PMI is projected to have a significant fall from April’s high level and even though this is considered as a decline, still it will be way above pre Brexit levels. This, in turn could be very beneficial for the pound and very encouraging for the country’s economy.

In the US, the ADP unemployment report is expected to be released with the figures being very similar to the levels of last month’s report. In case it is true, these are very positive news for the country, taking into consideration that this would be the 80th consecutive month with a rise in employment figures. This will have a very positive effect on USD.

On the graph below, you can see that both the “whisper” number and the “forecast” number are around 170k-180k. The former figure is calculated from a poll among Bloomberg subscribers whereas the latter is the average of published forecasts from professional forecasters and economists. Therefore, this could be a very accurate representation of the market, with similar numbers from economists, traders and other professionals.


The Institute of Supply Management PMI is more closely watched than the Markit PMI. The ISM index is expected to have a slight fall- less than the Markit PMI- remaining still at a reasonably healthy level. The prices paid index is anticipated to have a fall, too, at elevated levels still, suggesting additional inflationary pressures helping support USD.



The US Department of Energy’s (DoE) crude oil figures were predicted to fall by 3.0mn barrels, in line with the recent declining trend. However, last night the API showed a large decline of 8.67mn bbl. This resulted in a slight rise in oil but it still isn’t enough to recover all the losses. Nevertheless, the market seems to trust the DoE more than the API, therefore if the figures also fall we are expected to see more rallies.





Source: Claws & Horns

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