Here is what you need to know on Tuesday, June 2:
America is burning: Protests over the killing of George Floyd, an unarmed black man, continued raging in American cities, with some being violent. Markets have seemed to pause their rise and the dollar’s sell-off has also seemed to halt.
President Donald Trump blamed governors for being weak and suggested to use the military to help states or even declare martial law. Coronavirus – which disproportionately hit African-Americans – is still not under control and may accelerate its spread. The civil unrest is reportedly pushing politicians to accelerate talks on additional fiscal stimulus, and that may soothe markets.
The ISM Manufacturing Purchasing Managers’ Index came out at 43.1, a minor improvement, while the employment component also bounced from the lows, hinting about a better jobs report on Friday.
Cryptocurrencies: Bitcoin has blasted $10,000, hitting the highest since February while Ethereum is trading around $250, last seen in March.
GBP/USD has been one of the beneficiaries of the greenback’s weakness on Monday, topping 1.25. The Times reports that the UK may signal readiness to compromise fit the EU moves first. Brussels was reportedly willing to give ground on the politically sensitive fisheries industry last week.
COVID-19 cases continue falling in the UK, yet the data tends to be distorted over the weekend. Mortgage Approvals for April are set to plunge.
EUR/USD is holding above 1.11, as several European countries returning from long weekends. Spreads between German and Italian bonds remain low, a sign of hope that the European Central Bank will expand its Quantitative Easing program. Investors also hope fiscal support will be approved.
France and Spain continue easing restrictions amid improving coronavirus statistics. Germany has also reported a fall in cases but its Reproduction indicator (R) has topped 1, causing worries.
AUD/USD is trading around 0.68, holding onto its gains amid US dollar weakness and Australia’s success with curbing coronavirus. The Reserve Bank of Australia held its interest rate unchanged at 0.25% and pledged to keep borrowing costs as much as necessary.
USD/CAD is trading close to $35 amid Monday’s dollar weakness and ahead of Wednesday’s rate decision in Canada. WTI oil is holding above $35 amid the OPEC+ talks. Saudi Arabia and Russia may extend production cuts.
Gold is consolidating its gains just under $1,740 and may attract safe-haven flows. The precious metal also moves according to seasonal patterns.
See Gold shines on specific weekdays and seasons, but beware round numbers – Interview with Phil Carr
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