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02.07.202114:02 Forex Analysis & Reviews: Overview of the US market (07/02/2021)

Exchange Rates 02.07.2021 analysis

US indices posted another gain on Thursday, thanks to the sharp decrease in jobless claims. Dow Jones rose 0.4%, while S&P 500 and Nasdaq increased by 0.5% and 0.1%, respectively.

Data released yesterday said US jobless claims declined from 415,000 to 364,000.

But in terms of economic activity, a decline to 60.2 points was observed in the manufacturing sector. Fortunately, it was offset by the strong growth in the manufacturing sector, which rose to 60 points.

Today, a more detailed report on US employment will be published, wherein analysts forecast to see approximately 650,000 new jobs. The unemployment rate is also expected to decrease from 5.8% to 5.7%.

With regards to the Asian markets, opposite movements were again observed in the indices. Japan showed a 0.2% increase, while China posted a strong 2.7% decline.

Meanwhile, the oil market continued to rally, pushing Brent to $75.70 and WTI to $ 75. One of the main drivers is the announcement of OPEC that they will increase oil production by 400,000 bpd starting August to December.

In terms of the world's epidemiological situation, latest reports say the total number of new infections remain two times lower than record high, but is not decreasing further. UK has approximately 28,000, while US has 16,000.

Going back to the markets, S&P 500 closed at 4.320 points yesterday and ranged from 4.280 - 4.360 points. Investors were encouraged by the news that 130 countries agreed with the OECD proposal on minimum corporate tax rate. Now, large companies must pay at least 15% tax in the countries where they earn profit. This is an important change, especially for tech giants such as Apple, Google, Amazon, Facebook and others.

Another good news is the approval of the US House of Representatives on the $ 715 billion package that the Biden administration presented. If the Senate also gives their approval, US will have a new program for infrastructure. Included in the package are development plans for roads, bridges and many other things.

Unsurprisingly, dollar also rose yesterday, thanks to the evident strong economic growth. The USD index hit 92.60 points and ranged from 92.10 - 93.00 points.

Accordingly, USD/CAD also grew, bringing the quote to 1.2440. Its current range is 1.2380-1.2500.

Conclusion: S&P 500 hit a new all-time high, thanks to the strong economic growth fueled by successful vaccination programs, which kept COVID-19 infections at low level. But suddenly receiving weak economic data will trigger a deep correction in the market.

*La presente analisi del mercato ha un carattere esclusivamente informativo e non rappresenta una guida per l`effettuazione di una transazione.

Jozef Kovach,
Analytical expert of InstaSpot
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