| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | Switzerland | SECO Consumer Climate | May | -38.1 | -37 | -38.0 |
During today's Asian trading, the US dollar rose strongly against major currencies, continuing Friday's rally, and reaching its highest level since May 14, as the latest data on the US labor market forced investors to reconsider the prospects for easing the Fed's monetary policy.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.36% to 105.26. On Friday, the index jumped by 0.75%, as data showed that the nonfarm payrolls increased by 272,000 in May. Meanwhile, the figures for March and April were revised downwards by 15,000. Economists had forecast job growth of 185,000. However, the unemployment rate rose to 4% from 3.9% in April. Average hourly earnings increased by 0.4% month-on-month, compared with an expected 0.3% increase. After the publication of the data, the markets revised their expectations regarding the Fed's rate cut. On the other hand, the report, which, although it implies a potential delay in lowering interest rates in the United States, helped ease market concerns about the economic outlook, since a strong labor market is a positive factor for an economy that depends on consumer spending. Economists expect the Fed to maintain the status quo at this week's meeting, with investors now predicting only one 25 basis point rate cut this year. According to the CME FedWatch Tool, markets see a 8.9% probability of a 25 basis point rate cut at the Fed meeting in July, a 47.1% probability of a rate cut in September, and a 62.0% probability of monetary policy easing in November. Now the markets are waiting for the publication of May data on the consumer price index, which will take place just a few hours before the announcement of the Fed's rate decision on Wednesday.
The euro fell 0.4% against the US dollar amid increased political uncertainty after French President Macron called a snap legislative election. Macron took such a step after Eurosceptic nationalists made the biggest gains in European Parliament elections on Sunday, although centre, liberal and socialist parties were set to retain a majority.
The yen fell 0.3% against the US dollar, while investors are preparing for the meeting of the Bank of Japan, the results of which will be announced on Friday. Market participants do not expect Bank of Japan officials to raise interest rates this week, but they will probably announce a reduction in the monthly pace of bond purchases. Overall, the latest economic data on prices and economic growth do not suggest further tightening of monetary policy at the moment.