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Here is what you need to know on Tuesday, June 9:

US stocks are taking a breather after erasing the year-to-date losses and the dollar is licking its wounds. Speculation about the Federal Reserve’s decision on Wednesday, coronavirus decisions,  and a mix of figures is on the agenda.

Rally: Equitites continued benefiting from Friday’s Non-Farm Payrolls, which showed a surprising bounce in jobs, with the S&P erasing its losses for the year and the NASDAQ hitting all-time highs. The US dollar remained on the back foot and dropped also against the yen. On Tuesday, S&P futures point to correction and the dollar is trying to find its feet.

The recovery is also fueled by the Federal Reserve, which loosened its conditions for the Main Street lending program on Monday. The move comes ahead of its decision on Wednesday, where Chairman Jerome Powell and colleagues will likely leave rates unchanged and reiterate their commitment to the economy. 

North Korea has cut off communications with the South, following the distribution of anti-regime leaflets coming from activists in the South. The deterioration in relations is pushing the yen higher. 

Libya has halted petrol production at the El Sharara oil field amid an armed incursion. WTI has held onto gains around $38. Iraq’s oil minister reiterated his country’s commitment to the OPEC+ deal after doubts arose. 

Sino-American tensions remain on the back burner, but President Donald Trump’s intention to sign the Uyghur human rights bill is adding to tensions. The Uyghurs are a Muslim minority in the Western Chinese province of Xinjiang. 

Racial tensions remain high and the US and Trump’s handling of them has cost him some support, with rival Joe Biden expanding the gap. The elections remain far but markets may notice if the trend extends.

Gold has stabilized but struggles to recapture the round $1,700 level. Ongoing support may boost the precious metal higher.

The JOLTs job opening figures for April published on Tuesday is a lagging indicator but is followed by the central bank. Other indicators due out are Final Wholesales Inventories and the IBD/TIPP Economic Optimism.

EUR/USD is trading around 1.13, holding onto its range. Christine Lagarde, President of the European Central Bank, called on leaders to adopt the EU Commission’s ambitious plans that include mutual borrowing and grants.

The ECB announced €600 billion in additional monetary stimulus last week. Revised Gross Domestic Product and several German and French figures are eyed.

GBP/USD has been clinging onto 1.27 as the British government plans to ease lockdowns amid falling COVID-19 statistics. London reported no new deaths on Sunday. Brexit talks remain deadlocked.

AUD/USD has fallen off the highs, partially in response to ongoing tensions between Australia and China. Beijing warned its citizens against visiting the land down under amid a “significant increase in racist attacks” against Asians. 

Cryptocurrencies have been stable, with Bitcoin trading around $9,600. 

More Will race relations rock markets? Election campaign, coronavirus, crippled economy all in the mix

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