Ella 
Here’s what you need to know on Monday, June 5:
The U.S. dollar held its ground against major peers at the start of the week, with the U.S. dollar index extending Friday’s gains. Still, U.S. stock futures were mixed, reflecting a cautious stance. April producer price index (PPI) and June Sentix investor sentiment data will be on the European economic calendar ahead of the US release of April factory orders and May ISM services PMI.
On Friday, the U.S. Bureau of Labor Statistics reported that U.S. nonfarm payrolls (NFP) rose by 339,000 in May, well ahead of market expectations of 190,000. Further details of the report showed that the unemployment rate rose to 3.7% from 3.4% in April. The dollar regained traction on strong non-farm payrolls and recovered some of last week’s losses. Early Monday, the index continued to pull higher and remained in positive territory above 104.00. Meanwhile, the benchmark 10-year U.S. Treasury yield has risen more than 1% on the day above 3.7%. Still, markets are still pricing in a more than 70% chance the Fed will keep policy rates on hold at its upcoming meeting, according to the CME Group’s FedWatch tool.
Over the weekend, Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, said the kingdom would cut production by an additional 1 million bpd from July. In addition, OPEC and its allies (OPEC+) announced in a statement that they had reached an agreement with a combined production target of 40.46 million barrels per day from 2024. Crude oil prices rose on Monday following the development, with the barrel of West Texas Intermediate up nearly 2% at $73.20 for the last time of the day. The commodity-sensitive Canadian dollar remained resilient early on Monday, with USD/CAD flat on the day, just below 1.3450.
During Asian trading hours, data from Japan showed that Japan’s banking services PMI fell to 55.9 in May from 56.3 in April. USD/JPY largely ignored the report and started the new week bullish. At the time of the reporter’s visit, the pair was trading in a positive zone around 140.50.
EUR/USD posted sharp losses on Friday and extended losses early on Monday. The pair last traded below 1.0700.
Despite Friday’s pullback, GBP/USD ended the week slightly higher. The pair came under pressure during the European morning and tested 1.2400.
During the early Asian session on Tuesday, the Reserve Bank of Australia (RBA) will announce its monetary policy decision. The Reserve Bank of Australia is expected to keep its key interest rate unchanged at 3.85%. AUD/USD remains on a downtrend around 0.6600 ahead of this important event.
Gold prices fell sharply on Friday, erasing all gains for the week. Gold remains moderately bearish against the dollar and trades below $1,950 amid rising U.S. yields.
Bitcoin continues to fluctuate in a tight channel just below $27,000 after a choppy weekend. Ethereum failed to close above $1,900, despite rising above that level over the weekend. Ether edged lower against the U.S. dollar early Monday, last seeing losses of nearly 1% on the day at $1,870.
