Global Markets Analysis - June 6
6 June 2022
The US employment data announced on the first Friday of every month is in line with the expectations. While the number of non-farm payroll employees increased by 390 thousand, above the estimates of 320 thousand; The unemployment rate resulted in 3.6%, one click above the 3.5% forecast. The annual salary increase, which is an inflation indicator for the FED, increased by 5.2% in line with the expectations. Although the market reflection of the data was neutral at first, the markets, which were obviously confused afterwards, completed the last working day of the week in the shadow of sales. While the strong employment data indicated that the risk of recession decreased, we expected that the markets would also find support from this. However, although the belief that the worst is over in inflation is increasing, we see that the high course of inflation still disturbs the markets. US technology stock market Nasdaq, which rose 3% on Thursday, causing smiles, finished Friday with a decrease of 2.5%. We find it difficult to rationally explain why the rise and fall are so harsh. The anxious expectation of the FED's path, stuck between inflation and growth, makes it difficult for investors to see ahead.
At the start of the new day and week, we see China's service activity contracted for the third month in a row in May, despite the easing of COVID restrictions in Shanghai and neighboring cities. On the other hand, Russia hit Kiev with missiles for the first time in more than a month. Putin also warned that if western nations provide longer-range missiles to Ukraine, they will hit new targets. The war continues with all its speed and brutality. We are reading that Italian oil company Eni SpA and Spanish Repsol SA may start shipping Venezuelan oil to Europe next month to compensate for Russian crude. It was stated in the news that the oil volume expected to be bought by Eni and Repsol is not large and any impact on global oil prices will be modest. After the barrel price of oil closed the week near $120, it welcomes the new week at similar levels. Silver closed the past week without drawing a clear picture, oscillating around the technical zone of $21.85 - $22, which we have been bringing to the fore for a long time. The rise to the level of $ 22.50 on Friday, which will reflect the closing value of the week on the charts, left its place to a sharp decline after the US data, and completed the week at the level of 21.91. This morning, we see that silver has risen again to the level of $ 22.25. Similarly, gold oscillating around the technical level of $1,855 is not giving a clear direction signal yet. We think that the confusion in the markets is the main factor in this. Let's note that when the risk-off mode dominates and the dollar appreciates, precious metals also lose value immediately. For now, we prefer to wait on the side because its direction is not clear and our head is not clear.
Bitcoin, which has been falling uninterruptedly for exactly 8 weeks, completed the last week with a limited increase for the first time. We think long positions can be maintained in Bitcoin with a stop loss below the $28,800 level. Technically, the 34k level can be targeted.
After the US stock markets ended Friday with a sharp decline, futures transactions increased by 0.5% this morning, while Asian stock markets also embraced the day with an increase. With the expectation that the European Central Bank will tend to tighten despite the inflation problem in Europe, the EURJPY parity exceeded the 140 level and reached the peak of seven years.
This week, with the European Central Bank (ECB) meeting on Thursday, the CPI inflation to be announced on Friday in the USA comes to the fore. In the global financial markets, which we think will follow an unstable course for most of the week, we think that the tense expectations may increase again towards the end of the week.