Equity Markets

Unlike European stocks, which took a breather on Monday, investors drove the rally in the US markets – lifted by heightened expectations of a quicker recovery and a supportive Federal Reserve.

The jobs data on Friday has also contributed to the fierce rally seen on Wall Street on Monday. The S&P500 has jumped to a 15-week high, erasing its 2020 losses:

• Dow Jones Average Industrial gained 461 points or 1.7% to 27,572.
• S&P 500 added 38 points or 1.2% to 3,232.
• Nasdaq Composite rose by 111 points or 1.1% to 9,925.

Currency Markets

In the FX space, major currencies were mostly stronger against the US dollar. As risk appetite continues to improve, the greenback is sliding against its peers.

The Antipodeans remained among the best performers against the US dollar. Amid a lack of macro drivers on Monday, the Antipodeans were mostly left at the broader sentiment of the markets. The risk-on environment fueled by the prospects of a faster economic recovery continues to drive the AUDUSD and NZDUSD pairs higher.

After reaching an 8-week high, the AUDUSD pair consolidated around the 0.7000 level as traders were awaiting for fresh catalysts and economic reports before pushing the pair higher.

Commodities

During the month of May, demand and supply fundamentals in the oil market improved. The OPEC and non-OPEC members highlighted at the 179th Meeting of the OPEC conference that the recovery is gradual and remains fragile.

In light of the current fundamentals, all participating countries reached the following agreement:

1. Reconfirmed the existing arrangements under the April agreement.
2. Subscribed to the concept of compensation by those countries who were unable to reach full conformity (100 per cent) in May and June, with a willingness to accommodate it in July, August and September, in addition to their already agreed production adjustment for such months.
3. Agreed on the option of extending the first phase of the production adjustments pertaining in May and June by one further month.
4. Recognized that the continuity of the current agreement is contingent on them fulfilling elements 1 and 2 above.
5. Agreed without dissent that the full and timely implementation of the agreement remains inviolable, based on the five key elements, and endorsed the ‘Statement on the Declaration of Cooperation,’ which is annexed to this Press Release.

As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) are trading firmer at $38.58 and $40.80, respectively on the agreement of an extension.

Gold

Amid souring US-China and Australia-China relations and a sharp decline in the US dollar, the precious metal pared some losses seen last Friday. As of writing, the XAUUSD pair is trading at $1,697, just below the psychological level of $1,700.

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