Fed will be nowhere near to raising interest rates | 11 June 2021

#WTI:

The head of Russian oil major Rosneft, said on the weekend the world was facing an acute oil shortage in the long-term due to underinvestment amid a drive for alternative energy, while demand for oil continued to rise. Igor Sechin expected some shortages to kick in from the second half of 2021. This is a positive signal for oil prices! Additional support for the oil market will be provided by a weak dollar, as assets are historically inversely correlated. U.S. Treasury yields tumbled and the yield curve flattened on Friday after job gains in May fell short of expectations.

Trading recommendation: Buy 68.30 and take profit 70.00.

#SP500:

Nonfarm payrolls increased by 559,000 jobs last month, following an unexpected slowdown in the labour market in April. Despite May's gain, nonfarm payrolls remained 5%, or 7.6 million jobs, below their pre-crisis level. While employment metrics may not fully return to pre-pandemic levels, further progress is needed before the Federal Reserve might begin to withdraw some of the support it is providing to the economy, Cleveland Fed Bank President Loretta Mester said. This is a bullish signal for the US stock market!

Trading recommendation: Buy 4214 and take profit 4264.

XAUUSD:

The Labor Department’s non-farm payrolls for all of May showed that the United States added 559,000 new jobs in May and the unemployment rate fell to 5.8%. But economists expressed disappointment with the total jobs growth for last month that came in some 115,000 less than forecasts, showing recovery still had a long way to go. The Federal Reserve will be nowhere near to raising interest rates or pulling back the $120 billion of bonds and other asset purchases it has been carrying out monthly for the past one year to support the economy. This is a negative signal for the dollar and a positive signal for gold, since the assets are inversely correlated.

Trading recommendation: buy 1874 and take profit 1895.

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