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08.06.202113:00 Forex Analysis & Reviews: Overview of the US market (06/08/2021)

Exchange Rates 08.06.2021 analysis

Once again, US stocks were sluggish last week, showing minimal movement. The main reason is the sharp growth in inflation, which a month ago jumped to 4.2%. But the Federal Reserve is still firm on its decision not to tighten monetary policy, as according to them, the increase will be short-lived, so by next year, the figure will go back to around 2.0%. Although they also commented recently that a rate hike is beneficial for the US economy.

Another news is the increase of Brent above $ 70, thanks to growing demand and decrease in oil reserves. Commodity prices also jumped, which means that inflation may not go away as soon as the Fed hopes. On the bright side, COVID-19 cases are steadily decreasing due to the more active vaccination.

Last week:

Dow Jones dropped 0.1% (10 points) and ranged 34.640 - 34.630 points. It is projected to value around 34.300 - 34.900 points this week;

S&P 500 grew 0.65% (26 points), from 4.200 points to 4.226 points. It is expected to range around 4.100 - 4.300 points;

Nasdaq climbed 1.0% (140 points), from 13.740 points to 13.880 points. It is forecast to reach 13.500 - 14.200 points.

Conclusion: The US market may hit new all-time highs, depending on the May data on US inflation. Other reports such as ISM indices and employment data may influence the market as well. In any case, reaching the yearly highs will provoke sell-offs.

*Analisis pasar yang diposting disini dimaksudkan untuk meningkatkan pengetahuan Anda namun tidak untuk memberi instruksi trading.

Jozef Kovach,
Analytical expert of InstaSpot
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