US Dollar in the green with markets falling in risk off mode for this Tuesday

June 4, 2024

NEW YORK (June 4) The US Dollar (USD) trades back in the green on Tuesday in an attempt to recoup Monday’s losses. The Greenback is rallying supported by substantial safe-haven inflows as most major equity markets are in the red. The move sparked during the Asian trading session, with the Indian Nifty index falling over 5%, as Prime Minister Narendra Modi’s victory appears to be narrower than what polls were predicting.  

On the economic front, all eyes are on some important indicators that could further confirm the slightly downbeat sentiment surrounding the US economy. The main event will be the US JOLTS Job Openings report for April. Although this is a lagging number, job openings have been decreasing for several months in a row and a further decline could further confirm the end of that US exceptionalism. 

Daily digest market movers: JOLTS main driver

  • Just ahead of the US session the US Dollar remains strong on the quote board against its peers, with only safe havens Japanese Yen (USD/JPY) and Swiss Franc (USD/CHF) outpacing the Greenback in the broad risk off surge that is taking place ahead of the US numbers.
  • The Redbook Index for this week will be published at 12:55 GMT. The previous number showed a 6.3% increase.
  •  At 14:00 GMT, the JOLTS survey will be released.
    • Job Openings in April are expected to fall further to 8.34 million from 8.488 million a month earlier. 
    • Factory Orders for April are expected to increase 0.6% in April, slowing from the 1.6% rise seen in March. 
  • The TechnoMetrica Institute of Policy and Politics (TIPP) will release its Economic Optimism Index for June. The index is expected to increase to 45.2 from 41.8 in May. 
  • Equities are falling across the globe with the more than 5% sell-off in Indian equities. European indices are down near 1%, while US equity futures are losing less than 0.50%.
  • According to the CME Fedwatch Tool, Fed Fund futures pricing data suggests a 38.4% chance for keeping rates unchanged in September, against a 52.6% chance for a 25 basis points (bps) rate cut and a 8.9% chance for an even 50 bps rate cut. An interest rate hike is no longer considered an option since this week. For the upcoming meeting on June 12, futures are fully pricing in an unchanged result. 
  • The benchmark 10-year US Treasury Note trades around 4.39%, and trades not far from its monthly low at 4.34%. 

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