Weekly Market Outlook: OPEC+ and US Non Farm Payrolls in Focus
Investor attention this week will be largely focused on Friday and the release of the non farm payroll from the US. After surprisingly weak employment figures in April, we are set to find out whether this was merely an aberration or the start of a more concerning trend.
In a week which begins with both the UK and US markets closed, for the late May bank holiday and Memorial Day respectively, other key events to look out for include the release of inflation data from the EU, an interest rate decision from the Royal Bank of Australia and the all important meeting of OPEC+.
You can learn more about some of the global themes affecting the markets in this selection of education articles:
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Weekly Economic Calendar
Depicted: Admirals MetaTrader 5 - Economic Calendar
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Oil prices rose as the Asian markets began trading on Monday morning with the outlook for demand continuing to improve, meaning that oil is set to close its second consecutive month of gains.
After both falling during Friday’s session, Brent and WTI futures were up 0.62% and 0.56% respectively by 11:00 BST.
On Tuesday, the Organisation of the Petroleum Exporting Countries and allies (OPEC+) are set to meet to discuss supply policy against a backdrop of rising global demand as economies from Europe, the US and China continue to recover from the Covid-19 pandemic. Investors anticipate that demand will continue to accelerate throughout the remainder of the year.
It is expected that OPEC+ members will continue to gradually ease its current restrictions on oil supply until July. Particular attention will also be paid to any news about Iranian supply as talks of the revival of the 2015 nuclear deal could lead to the easing of US sanctions.
Depicted: Admirals MetaTrader 5 - Brent Crude Daily Chart. Date Range: 1 April 2020 - 31 May 2021. Date Captured: 31 May 2021. Past performance is not a reliable indicator of future performance.
Brent crude has been following an upward trend since the end of 2020. It is currently trading above both its 50-session moving average (white) and its 100-session moving average (red), slowly approaching $70 a barrel. Will we see prices pass this important level this week for the first time since March?
Depicted: Admirals MetaTrader 5 - Brent Crude Weekly Chart. Date Range: 6 September 2015 - 31 May 2021. Date Captured: 31 May 2021. Past performance is not a reliable indicator of future performance.
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US Non Farm Payroll
April’s employment data from the US fell massively short of analysts’ expectations - with only 266,000 jobs added to the economy against an expected 990,000.
These underwhelming figures led to steep drops in the US dollar, continuing the downward trend against other major currencies which we have observed since the beginning of April.
The US is expected to have added 650,000 new jobs to the economy in May and economists remain optimistic about strong growth in the labour market in the months ahead as the post-pandemic recovery continues to build momentum.
Depicted: Admirals MetaTrader 5 - US Dollar Index Daily Chart. Date Range: 30 October 2020 - 31 May 2021. Date Captured: 31 May 2021. Past performance is not a reliable indicator of future performance.
After a positive start to the year for the US dollar index, it has lost ground and is on course to record its second consecutive month of loss.
Currently it trades around the $90 level, down from a high of $93.43 at the end of March, but not quite reaching the three year low we saw at the beginning of 2021.
More disappointing employment data on Friday is certain to negatively impact the outlook for US economic recovery and could further accelerate declines in the US dollar.
Depicted: Admirals MetaTrader 5 - US Dollar Index Weekly Chart. Date Range: 6 September 2015 - 31 May 2021. Date Captured: 31 May 2021. Past performance is not a reliable indicator of future performance.
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