The US economy continues to experience problems with the growth in the number of new jobs in the national economy, which seriously worry investors primarily because of its great impact on the situation in the global economy.
Based on the presented data, America's labor market received only 235,000 new jobs against the forecast of growth of 750,000. These values fully showed that the impact of the COVID-19 pandemic is still significant.
As expected, the markets reacted to this news with a drop in demand for company shares, a local decline in the dollar exchange rate and the value of commodity assets. But, this negativity will most likely be quickly overcome, since it is fully compensated by the still remaining super-soft course of the Fed's monetary policy and the presence of Fed Chairman J. Powell's promises. He said that the regulator will begin to reduce the volume of repurchase of government bonds and corporate mortgage securities, and actually printing money. It is Powell's words about the importance of the development of the situation on the labor market and the dependence of the bank's monetary rate on it that is the cornerstone that conducts all markets.
So, while the unemployment outlook will remain extremely complex and unclear, the US Central Bank will keep a pause in deciding on the start of a change in the course of monetary policy. This means that the US dollar will not have broad grounds for growth, but the demand for risky assets, as well as for commodity assets, will be supported. The growth of the latter will primarily occur due to the weakness of the US currency exchange rate.
Today, the Asia-Pacific region traded on a positive note, Europe also opened in positive zone, and futures for major US stock indexes are showing positive dynamics.
The United States and Canada are in a holiday on Monday. Thus, the local financial markets will be closed. It is clear that the US market is important for investors. The absence of American market participants will somewhat reduce activity in Europe, but will not have a strong impact, since market players have already played out the topic of negative news from the United States and are focusing on maintaining massive support measures in the US economy, which stimulates the rise of positive mood.
Forecast of the day:
The EUR/USD pair is declining on the wave of a slight pullback of the US dollar in the currency market. We believe that the price may decline to the level of 1.1850, and then turn upward and rush to 1.1910.
The AUD/USD pair is also declining, and if it finds support at the strong level of 0.7410, it is highly likely to make an upturn and move to the level of 0.7500.