Several Fed representatives are expected to speak today - 2.6.2021

Today, the US dollar index is rising for the second day in a row. It rallied slightly from a 5-month low and is again trading above the psychological 90-point mark. Investors hope that the Fed will nevertheless announce plans to tighten its monetary policy at its next meeting on June 16. Yesterday's positive economic data contributed to this. Growth indicators Markit Manufacturing PMI Final and ISM Manufacturing PMI in May exceeded forecasts. Moreover, the ISM indicator has reached its maximum since July 2008. The US Beige Book economic review is due today, and the Fed is expected to speak. The euro exchange rate is declining today for the second day in a row. Yesterday, inflation in the EU in May rose to 2% yoy from 1.6% in April. This is the highest since October 2018 (EURUSD was around 1.15 back then). Retail sales in Germany for April (+ 4.4%) came out today, which turned out to be worse than forecast (+ 10.1%).

On Tuesday, the change in US stock indices was minimal. On the one hand, the active recovery of the US economy and good macroeconomic data are pushing stock prices upward. On the other hand, Fed's any opinion on tightening monetary policy will inevitably provoke a noticeable correction in stock markets. Most likely, the low activity on the American stock exchanges will remain until Friday, when the publication of important data on the labor market for May (Non Farm Payrolls) is expected. It is also possible that the neutral trend will continue until the Fed meeting on June 16 or the ECB meeting on June 10. Note that yesterday the pan-European stock index STOXX 600 updated the historical maximum. Previously, it lagged behind the US S&P 500. Yesterday, the small investor community on the Reddit service began discussing AMC Entertainment and its shares rose 23%.

World oil prices are rising today for the third day in a row. Brent has surpassed the psychological level of $70 a barrel. The main reason for this was the OPEC+ decision to keep the previous April plan to increase production despite the faster recovery of the global economy. Now, as expected, in June oil production, including Saudi Arabia, will increase by 700 thousand barrels per day (bpd) and in July - by 840 thousand bpd. The next OPEC+ meeting will take place on July 1. The International Energy Agency expects an increase in world oil demand by another 5 million bpd by the end of this year. Negotiations between Western countries and Iran over the lifting of sanctions and the conclusion of a "nuclear deal" are likely to end only in August. Only then can we expect an increase in Iranian oil production.