U.S. Stocks Set To Open Higher As Unemployment Rate Drops To 13.3%
Non Farm Payrolls Report Shows That 2.5 Million Jobs Were Added In May
The U.S. has just provided another set of employment data for May.
Unemployment Rate was 13.3%, down from 14.7% in April and much better than the analysts’ expectation of 19.8%.
Non Farm Payrolls report showed that 2.5 million jobs were added in May compared to analyst expectations that 8 million jobs were lost. This is a major surprise after yesterday’s Continuing Jobless Claims report which showed that the number of people getting unemployment benefits increased.
Not surprisingly, S&P 500 futures are up more than 1% in premarket trading following the release of these employment reports.
OPEC+ Is Set To Meet On Saturday
Yesterday, oil prices were under some pressure as traders had doubts about the extension of current oil production cuts.
Today, oil is back to the upside mode following a report which stated that OPEC+ will meet on Saturday to discuss oil production cuts.
Saudi Arabia and Russia have reportedly agreed to extend current oil production cuts by one month. The problem is that countries like Iraq and Nigeria did not comply with their quotas, and leading OPEC+ countries want them to cut production according to the original deal.
The difference between keeping existing production cuts for one month or proceeding with the original deal is 2 million barrels per day of oil production. This is a significant amount of oil so the oil market will likely get additional support in case OPEC+ agrees to extend current production cuts for the month of July.
Gold Stays Above $1700 Per Ounce While the U.S. Dollar Continues To Drop
The widespread optimism in the global market was not able to hurt the position of gold which has been trading near $1700 per ounce since early April. Meanwhile, the U.S. dollar is under pressure as traders prefer riskier currencies.
This is an interesting setup as it highlights the traders’ desire to hedge their risks. Theoretically, gold should have suffered during a major stock market rally as traders would have sold all safe haven assets, but this does not happen in practice.
In addition to gold’s role as a hedge against potential stock market downside, traders are betting on the continuation of the unprecedented monetary stimulus from the world central banks.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
