Top 5 Things That Moved Markets This Past Week
1. Blowout Jobs Report, Italian Political Turmoil, Return of Tariff Tantrums Rock Markets
U.S. markets were rocked by the return of tariff tantrums and geopolitical uncertainty in the Eurozone but as focused shifted to domestic issues a bullish jobs report helped steady risk appetite.
Private payrolls grew by 223,000 for the May, a sharp uptick from the 163,000 in April, according to a report released Wednesday by ADP and Moody’s Analytics. That beat economists’ forecast of 189,000.
That provided the impetus for U.S. stock to recoup some of their losses which followed fears that a global trade war beckons.
2. Crude Oil Prices See Red for Second-Straight Week
Crude oil prices adding to their 5% loss last week, with a 3% slump this week following an expansion in U.S. oil output and uncertainty on whether OPEC and its allies would ease limits on production.
As the OPEC meeting slated for June 22 draws closer, traders remained wary of the oil-cartel easing production limits despite a Reuters report mid-week, citing a Gulf source, OPEC and its allies would stick to production curbs, which have helped slash the glut in global supplies.
Fears that limits on the production-cut agreement could be eased overshadowed a weekly Energy Information Administration report showing U.S. crude supplies unexpectedly fell by 3.6 million barrels in the week ended May 25.
Crude futures settled 1.8% lower on Friday as data showed U.S. oil rigs increased, pointing to signs of growing domestic output.
3. Dollar Notches Third Weekly Win
The dollar scraped its third-straight weekly win after a strong jobs report Friday helped the greenback recover some of its early-week losses.
The U.S. economy created more jobs than expected and wage growth topped estimates, paving the way for the Federal Reserve to hike rates in June, helping the greenback steady against its rivals.
The greenback suffered heavy losses on Wednesday after the EUR/USD rallied on reports that Italy’s anti-establishment parties were prepared to return to the negotiation table and resolve their differences to form the country’s next government.
Last-ditch talks by Italy’s Five-Star Movement and League were successful as Giuseppe Conte was sworn in as Italy’s new Prime Minister on Friday.
The dollar rose 0.24% to 94.18 against a basket of major currencies on Friday.
4. Gold’s Promise Falters
GOLD Prices were unable to add to their gains from last week, posting a weekly loss as the prospect of the further Fed rate hikes in the wake of an upbeat jobs report reduced demand for the yellow metal.
In the aftermath of the U.S. jobs report showing higher-than-expected wage growth, traders’ expectations for a faster pace of rate hikes edged higher. Analysts warned, however, that a single jobs report, albeit solid, was not enough to warrant a faster pace of rate hikes.
Investing.com’s Fed Rate Monitor Tool showed the odds of a fourth rate hike at the Fed’s December meeting rose to 32.6% from 27.6% yesterday.
5. Traders Ready to Call Bitcoin’s Bluff?
Bitcoin saw lower lows this week but its test of $7,000 was met with a wave of buying, stoking hopes of a recovery in the popular crypto.
Some analysts said earlier this week that the $7,000 region triggered some “very key” support for bitcoin, opening the door to a possible recovery.
“We think Bitcoin is starting to bottom off some very key support around $7,000 and we think it’s going to start a recovery process here,” Robert Sluymer, head of technical strategy at Fundstrat Global Advisors, told CNBC’s “Futures Now” on Thursday.
Yet, traders continued to adopt a cautious approach, appearing unwilling to make a meaningful return to the crypto space as data showed the crypto total market cap remained stagnant compared to last week.
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