TRACKRECORD DAILY
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TRACKRECORD DAILY

How would you like to lose at least 2% of your savings every year?

This is the Federal Reserve’s promise to you if you are keeping your savings in the USD.

MARKET OBSERVATION

Bitcoin Selloff Nearing Completion (Exchange Flows Chart)

DAY AHEAD

Eyes on the May Nonfarm Payrolls (expected 720,000; prior 266,000), Nonfarm Private Payrolls (expected 650,000; prior 218,000), Average Hourly Earnings (expected 0.2%; prior 0.7%), Unemployment Rate (expected5.9%; prior 6.1%), and Average Workweek (expected 34.9; prior 35.0) to be released later today. Expectations of a large upside surprise are growing after the strong ADP jobs number last night and the announcement that Biden will be addressing the press 1 hour and 15 mins after the data release. Although Biden also spoke after last month’s number (which wasn’t so strong), last night’s ADP showing that private payrolls increased by 978,000 in May (expected 675,000) is fanning optimism for an upside surprise.

TRADING PLAN

1. Currencies: Keep short USD and long NZD, & CNH. USDCNH is trading close to the resistance at 6.40–6.42 level and when momentum for this USD correction wanes, it will be a good opportunity to add to shorts. Stay short USD and Long CNH & NZD.

WHAT HAPPENED YESTERDAY

As of New York Close 3 Jun 2021,

  • ISM Non-Manufacturing Index for May increased to 64.0% (expected 63.0%) from 62.7% in April. The dividing line between expansion and contraction is 50.0%. The May reading marks the twelfth straight month of growth for the services sector and is a record high for this series.
  • U.S. Dollar Index rose +0.6% to 90.48. Dollar rose to a three-week high on Thursday, bolstered by stronger-than-expected U.S. jobs data that suggested an improving labour market and reinforced signs that the world’s largest economy was on its way to recovery from the COVID-19 pandemic. In other currency news, Russia announced it would completely remove U.S. dollar assets from its National Wealth Fund (NWF — US$185 billion), while increasing the share of the euro, Chinese yuan and gold, according to Finance Minister Anton Siluanov on Thursday. The changes are expected within a month. The move did not have any immediate impact on currencies.
  • US 10-yr Bond yield rose 4 basis points to 1.63%. 2-year yield rose 3 basis points to 0.16%.
  • The stock market ended Thursday on a lower note, though the S&P 500 (-0.4%) was able to reclaim the bulk of its opening loss. The Dow (-0.1%) outperformed the other indices throughout the day while the Nasdaq (-1.0%) finished behind the broader market.
  • The technology sector lagged throughout the day as some of its top components sputtered. Apple (AAPL 123.54, -1.52, -1.2%), Microsoft (MSFT 245.71, -1.59, -0.6%), MasterCard (MA 361.82, -5.03, -1.4%), and PayPal (PYPL 257.79, -4.38, -1.7%) kept the sector under pressure while chipmakers also struggled, sending the PHLX Semiconductor Index lower by -1.8%. Tesla (TSLA 572.84, -32.28, -5.3%), which fell to its lowest level in two weeks after The Information reported that the company’s May orders in China were down 50% month-over-month.
  • AMC (AMC 51.34, -11.21, -17.9%) sold off more than 40% in the first few hours of trading on news that the company had issued more stock (11.55 million shares at approximately $50.85 raising $587 million). There was a charge into positive territory in the afternoon. The stock finished in the red while Bed Bath & Beyond (BBBY 31.90, -12.29, -27.8%) also reversed after the prior day’s surge.

HEADLINES & MARKET IMPACT

Biden proposes 15% corporate minimum tax to win Republican backing of infrastructure plan

SENTIMENT

FX

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