US dollar grinds even higher. USD/JPY at the highest since March.

US dollar hits fresh highs

US dollar hits fresh highs
The US dollar continues to run in the wake of the ADP jobs data.
The market is braced for a stronger non-farm payrolls report on Friday than the +655K consensus.
Giving the dollar a further lift was a series of reports that said Biden has offered a new infrastructure deal to Republicans that doesn’t raise corporate tax rates. Instead, it will ensure a 15% floor on what companies pay.
That turned around stock markets and has pushed up rates modestly.
The USD/JPY chart (above) shows how important today’s price action is. It’s a break of the May high and a continuation of the series of higher highs and higher lows that started in late April. It would be easy to see it back at the March highs.
Beyond that, this chart shows you what’s really at stake: A four year downtrend that already looks like it’s on the verge of unwinding.
USDJPY weekly

Eurozone May final services PMI 55.2 vs 55.1 prelim

Latest data released by Eurostat – 3 June 2021

  • Composite PMI 57.1 vs 56.9 prelim
The preliminary report can be found here. The composite index is the highest since February 2018 and this reaffirms a strong May month for the euro area as looser virus restrictions bolstered demand conditions and new businesses.
Employment conditions were also seen improving for a fourth month so that is encouraging but cost inflation remains a problem that is likely to persist further in the months ahead. Markit notes that:

“The eurozone’s vast service sector sprang back into life in May, commencing a solid recovery that looks likely to be sustained throughout the summer.

“Businesses reported the strongest surge in demand since the start of 2018 as covid restrictions were eased and vaccine progress boosted confidence.

“After covid fighting measures were tightened to the harshest for a year in April, restrictions eased considerably in May on average. These measures are on course to moderate further at least until the autumn, assuming further significant covid waves are avoided. This should facilitate the further return to more normal business conditions as the summer proceeds. Business optimism for the year ahead has consequently hit the highest for over 17 years.

“The service sector revival accompanies a booming manufacturing sector, meaning GDP should rise strongly in the second quarter. With a survey record build-up of work-in-hand to be followed by the further loosening of covid restrictions in the coming months, growth is likely to be even more impressive in the third quarter.

“A growing area of concern is capacity constraints, both in terms of supplier shortages and difficulties taking on new staff to meet the recent surge in demand. This is leading to a spike in price pressures, which should ease as supply conditions improve, but may remain an area of concern for so

US Indices give up most of the earlier gains but still close higher

Major indices little changed

The US stocks gave up most of their earlier gains but still found some buying near the close and are closing higher on the day.
    • The Dow industrial average has extended its winning streak to 5 trading days.
    • The Dow is 2% from its all-time high
    • The S&P is up 4 of the last 5 trading days.
    • The S&P is less than 1% from the all-time high
    • The up one day, down the next for the Nasdaq index is on day 10.Today was an up day (tomorrow lower?).
    • Energy is a best-performing sector as crude oil rallies to the highest level in 2 1/2 years.

The Meme frenzy continued today with:

  • AMC shares up 95% on the day
  • Bed Bath & Beyond rose 62.11%
  • Blackberry rose 31.92%
  • GameStop up 13.34%
The closes for the day are showing:
  • S&P index rose 6.10 points or +0.15% at 4208.14
  • NASDAQ index rose 19.85 points or 0.14% at 13756.33.
  • Dow rose 25.07 points or 0.07% at 34600.38
  • Russell 2000 rose 3.09 points or 0.13% at 2297.83
At the highs and lows for the day,
  • The S&P was up 15.32 points and down -3.78 points
  • The Nasdaq was up 39.41 points and down -46.74 points
  • The Dow was up 131.34 points and down -29.35 points
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