Daily summary: Global risk-on market sentiment prevails

6:40 PM June 5, 2020
• NFP report showed surprise job additions in May
• NASDAQ-100 jump to record highs
• Gold drops to 7-Week Low

Champagne moods prevail today among investors. After a slight correction, which occurred yesterday, stock indices gained strength and resumed bullish rally after unexpectedly good NFP report. Recent data from the Labor Department showed nonfarm payrolls rose by 2.509 million jobs last month after a record plunge of 20.687 million in April, and the unemployment rate unexpectedly fell to 13.3% in May from 14.7% in April. However some analysts said the numbers were at odds with more recent data from showing initial and continuing jobless claims still running at a high rate at the end of May. Shortly after the publication of today's NFP report, Donald Trump via Tweeter expressed his great satisfaction with the latest labor data. He claimed in a somewhat humorous way that such good figures were due to his presidency.

US Indices surged on Friday. The Nasdaq-100 index hit all-time high and so far there are no signs indicating a possibility of correction. At the turn of February and March Nasdaq-100 fell by over 30%, however today downward movement has been completely erased. Meanwhile S&P 500 and Dow Jones indexes are trading respectively 7% and 10% below their historical highs. However, it should be remembered that while the indices are climbing higher and higher, the risk of profit taking increases. During today’s session Dow Jones rose so far 3.68 %, S&P 500 added 2.94 % and Nasdaq is trading 2.35 % higher.  Also all major European indexes finished today’s session in green. The German DAX gained 3.4%, the French CAC40 added 3.76%, and the London FTSE100 ended 2.0% higher.

Risk on mood caused gold prices to fall to the lowest levels in seven weeks. Gold futures for delivery on the Comex exchange dropped 2.7% at $ 1,680.40 a troy ounce, while spot gold fell 2.1% at $ 1,677.78 an ounce. Other precious metals fared similarly badly, with platinum futures plunged 4.3% to $ 827.80 an ounce and silver futures falling 3% to $ 17.52.

The Canadian dollar was trading around $1.34, its highest level since March 6th, after latest data showed the Canadian economy unexpectedly added 289.6K jobs last month supporting investor optimism about economic recovery. Also, a rally in oil prices after OPEC+ decided to meet on Saturday to discuss whether to extend record output cuts supported the currency. 

Economic calendar for Monday is almost empty. German industrial production and GDP data from Japan  are the main prints scheduled for release but should not have much of an impact on prices.
USDCAD managed to break below major support level at 1.35 which was additionally strengthened by 200 MA (redline). As long as the price sits below it, the downward move towards 1.3317 looks to be more probable. On the other hand, once buyers regain control, the resistance at 1.3709 may be at risk. Source: xStation5

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