This is what you need to know to trade today Wednesday 5 May:
Markets stabilize and the US dollar retreats from its highs after a Tuesday of risk aversion, partly sparked by comments on rate hikes from US Treasury Secretary Janet Yellen. ADP employment figures and ISM Services PMI will be the focus of investors today. Commodities are increasing while cryptocurrencies are stable.
The Secretary of the Treasury, Janet Yellen, said that interest rates could rise to fight inflation if necessary, in comments that caused nervousness in financial markets. The former Fed chairwoman later clarified that her comments were not intended to predict price increases or increases in borrowing costs and that she respects the independence of the central bank. However, the dollar strengthened and stocks fell on Tuesday.
The private sector labor market figures from ADP show an increase of 872,000 jobs in April, compared to the 517,000 registered in March. While the correlation between the data from the payroll company and the official figures is not always evident.
See: US ADP Employment Change Preview: Caution Emerges in Manufacturing
It is expected that the PMI purchasing managers index of ISM services show an acceleration from an already high level of 63.7 in March. The employment component is seen as another clue to Friday’s NFP nonfarm payrolls.
See: April ISM Services PMI Preview: Inflation Readings Remain Key As Recovery Gains Traction
Coronavirus: India continues to struggle with a severe wave of COVID-19, with projections pointing to an increase in deaths in the coming days. In Europe, vaccinations continue at full speed, with Germany reporting a drop in its incidence rate. US President Joe Biden announced a change in vaccine distribution, with the goal of reaching more people in remote locations.
The EUR/USD it is around 1.20 ahead of the final services PMIs and the publication of new economic forecasts by the EU. The GBP/USD it moves around 1.39 as tensions rise ahead of the Bank of England decision on Thursday.
The NZD / USD jumped above 0.7150 after New Zealand reported a surprising drop in unemployment rate to 4.7% in the first quarter of the year.
The copper it has resumed its earnings, along with other commodities. According to Bloomberg, prices are up 70% from the March 2020 low.
Cryptocurrencies: Bitcoin remains above $ 54,000 and Ethereum below $ 3,300, while moving in a range.