Asia equity markets opened with soft positive price action as trade picks up from the prior session’s holiday pause. UK and US markets were closed for the day. On the radar for the week, investors will be paying attention to the macro-economic figures which includes US, EU, UK, Purchasing Managers’ Indexes (PMIs). The figures should keep printing higher as global trade is getting hotter as COVID restrictions in the US, UK, and now Europe is easing faster. Central Bankers will be closely watched as traders look for clues to start a tightening monetary policy cycle. ECB Chief Lagarde speaks on Wednesday and Friday with Fed Chair Powell also on the day’s schedule.
The main risk event for the week is the US Nonfarm Payrolls which figures due on 4 June bear greater weight on the US macro narrative, following the lower-than-expected surprise on the headline figures posted last month. A stronger reading this Friday could drive a selloff in US Treasuries, sending its yields climbing, which in turn would send the US dollar higher against EMFX and G10FX. The equity market could see some weakening due to its sensitivity to the rising short-term yield. In this case, the participants will be trying to anticipate FOMC tapering talks in the future meeting if the job’s market starts to show signs of heating.
