Central Bank of Australia, data from ADP and German stimulus

3 มิ.ย. 2020

There are no changes on the fundamental fronts: protests in the USA continue, the pandemic is still here, as well as the reopening of economies. Against this background, the dollar continues to suffer losses in the foreign exchange market, but the stock markets are growing steadily. At the same time, yesterday yen sharply intensified its decline. Paired with the dollar, it has broken important technical resistance 108.

Trump, amid all this, is either hiding in the bunker or threatening to send the military to disperse the demonstrators. In general, the weakness of the dollar is understandable and logical, and the growth of US stock indices is no less incomprehensible and irrational (from the point of real economy).

In the oil market, meanwhile, everyone is puzzled by the future of the OPEC + deal. Will the current status quo continue or will the main producers begin to increase production? Future of oil prices depend on the answer to these questions. The fact is that the current agreement on 9.7 million b / d production cuts expire in June and the question of cuts becoming more urgent. Much depends on the position of Russia.

The OPEC + meeting is expected to take place online on Thursday. Saudi Arabia insists on keeping current levels of decline longer.
German Chancellor Angela Merkel, meanwhile, without waiting for the creation of 750 billion euros European fund, offers another package of measures to help the country's economy in the amount of up to 100 billion euros.

Yesterday, the Reserve Bank of Australia left the rate unchanged, but was very optimistic in its assessments of what is happening in the country's economy, which largely contributed to the growth of the Australian dollar. The latter has already added about 20% in April-May, which, in our opinion, is too much and we are starting to prepare for its medium-term sales. But in pair with the dollar, you need to wait at least until downward pressure on dollar in the foreign exchange market will ease.

Wednesday is interesting day in terms of macroeconomic statistics: unemployment data in Germany and the Eurozone as a whole. But the main news will be US employment data from ADP. Although this is not official statistics (will be published on Friday), the latest ADP data almost in one to one corresponded to the NFP figures, so they are definitely important. It is also worth monitoring the index of business activity in the United States, the Eurozone and Germany. Also Bank of Canada will meet today and announce its decision on monetary policy parameters.

In general, the day promises to be extremely eventful. Despite the current more than obvious problems of the dollar, it seems to us that it has already received enough, and a number of pairs (EURUSD, GBPUSD, AUDUSD, USDCAD, etc.) have approached quite important levels. So today we will buy the dollar in these pairs in the hope of a reversal, but with mandatory small stops.