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Investors around the world continue to show extreme cautiousness, watching the release of economic statistics in economically developed countries, as well as the course of vaccination against COVID-19.
As previously mentioned, the drop in the activity of market participants in May and on the first day of June is due to real inconsistencies in forecasts of the world Central Bank led by the Fed, and financial blocks in economically developed countries. Earlier, the Federal Reserve stated that a sharp growth in US inflation will be accompanied by rapid economic growth, but so far, there is only an increase in inflationary pressure. At the same time, the "helicopter money" provided by the Biden administration for the American citizens is not able to launch the real process of restoring the national economy, which was destroyed by the 2008-09 crisis and the coronavirus pandemic. Americans do not want to return to previously working in low-paid jobs and prefer to live on Biden's help, which actually destroys the economy.
The latest economic statistics point to a weak spring recovery. And although the US ISM Manufacturing PMI, which was released on Tuesday, showed an increase to 61.2 points against 60.7 points, this cannot completely replace the significant problems of the overall state of the US economy and especially its labor market.
It can be recalled that this week's most important news is not only the release of data from the US labor market. With a delay of one day due to the holiday, the values for the number of new jobs from ADP will be released on Thursday, while the official ones from the Ministry of Labor will be presented on Friday.
It was already emphasized several times that these data, which will show how realistically the US economy is recovering, is very important. Earlier, J. Powell stated that inflation growth will be temporary amid strong economic growth. However, this growth of the national economy is provided by production and services, and a clear problem is noted precisely because of the weak dynamics in the labor market.
That's why investors have been waiting for the release of the unemployment data. They want to see real confirmation of Powell's words, not just statements, and declarations.
Given such a difficult situation, we believe that today's activity of investors will remain at a low level. One can only expect some kind of recovery with the publication of employment figures on Thursday and Friday, but only if the value of the number of new jobs is noticeably higher or lower than what was forecasted.
Forecast of the day:
The EUR/USD pair remains in the range of 1.2160-1.2260. We expect the pair to consolidate in this range before the US employment data is published.
The USD/CAD pair is consolidating in the range of 1.2020-1.2140. We believe that the pair will remain in this range today.
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