This is what you need to know to trade today Thursday 6 May:
Investors appear to be ignoring rising signs of inflation, supply chain problems and geopolitical tensions around Brexit and China’s relations with the West. The Bank of England may announce a gradual reduction in its bond purchases and US jobless claims are ahead of Friday’s Non-Farm Payrolls. Cryptocurrencies are consolidating their gains.
The US dollar and equity markets remain higher despite the growing concern about inflation. The 5-year / 5-year breakeven, an indicator of future price increases, is at its highest level since 2008. However, the Federal Reserve continues to claim that price increases are transient and that the economy still has “a long way to go.” The latest comments came from Eric Rosengren and Lauretta Mester on Wednesday. John Williams will speak today Thursday.
ISM’s Services Sector Purchasing Managers Index fell short of estimates, scoring 60.7 points for April, indicating a slowdown due to supply chain issues. ADP’s private sector labor statistics were also below expectations, adding to the lower forecasts for Non-Farm Payrolls on Friday. The weekly unemployment claims they will remain around the 553,000 reported last week.
Despite the increase in the profitability threshold, the Treasury yields remain stable and the dollar is also stable, with the EUR / USD hovering around the 1.20 zone.
It is anticipated that the Bank of england leave your interest rate unchanged on “Super Thursday” and raise your growth forecasts substantially. Speculation about the BOE’s bond purchase plan is mounting, with some predicting that Governor Andrew Bailey and his colleagues will announce that they are reducing bond purchases.
Bank of England Preview: Three Reasons Super Thursday Could Turn into a Feast of Suffering for the Pound
Brexi: Britain is sending artillery to Jersey, as a precaution before a planned protest by French fishermen. The two countries disagree on the use of the waters around the island, which is close to the French mainland.
The British go to the polls in local and regional elections, notably the Scottish parliamentary vote. A majority of pro-independence parties could increase tensions between Edinburgh and London. The GBP/USD it holds on to 1.39 amid these three events.
GeopoliticsChina canceled trade talks with Australia, a mostly symbolic move, but one that reflects growing tensions between the two countries. AUD / USD fell in response. The G-7 foreign minister also singled out China for its human rights abuses and practices.
Coronavirus: Moderna announced that its vaccines tackle new strains of COVID-19, providing optimism. On the other hand, India recorded another daily record of infections.
The cryptocurrencies have stabilized after a bullish move. Bitcoin is around $ 57,000, Ethereum is above $ 3,400 and XRP is above $ 1.60.
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