As the end of the trading week approaches, the markets are caught in the crosshairs of President Trump’s latest actions and forecasts ahead of the official NFP data. Let’s cut through the noise!
First thing, first: NFP
Although overshadowed to a certain extent by the recent geoeconomic shockwaves, the NFP (Nonfarm Payrolls) remains one of the closely watched economic releases. On June 6, the US Bureau of Labor Statistics will release its Nonfarm Payrolls Report for May. As always, ahead of the official data, predictive figures begin to trickle in, stirring volatility.
This time around, analysts are less positive about the expansion of the US labour market. In May, the US economy is expected to have added 130,000, while the unemployment rate is forecast to remain unchanged at 4.2%.
This slowdown in the nonfarm sector is attributed to general economic uncertainty, continued trade disputes, and federal downsizing. Surprise in any direction will give way to bullish or bearish movement in the US Dollar. Should the official data come in higher than expected, it will likely raise the Fed’s scope to hold rates steady. Comparatively, a weaker job report will pressure the Fed to loosen its restrictive policy further.
On Thursday, EURUSD inched lower, trading in the area of 1.1400, while GBPUSD held firm at 1.3550, amid GBP strength whiplashing a weaker greenback.
Safe-haven silver maintained its bullish trajectory, bolstered by strong bids at $34.00. Will it continue to ascend? Log in to TibiGlobe and see for yourself!
Next on the docket: Steel & aluminium tariffs
NFP predictions aside, President Trump’s recent 50% tariffs on aluminium and steel imports have rattled the markets, adding to the supply chain pressures. Even more so, as from the initially announced 25%, the US President doubled the stakes. Let’s examine the immediate market impact.
Intended to “further secure the steel industry in the United States”, the tariffs only added to the broadening market fears. The US is heavily reliant on steel imports, acquiring more material from abroad than any country in the world, according to the International Trade Administration.
Last year alone, over 26 million metric tonnes of steel were imported from Brazil, Canada, Mexico, South Korea, and China. Needless to say that both steel and aluminium are used to manufacture anything from beer cans to vehicle parts, office supplies, and electronics. Double import taxes will feed through into the final price of these products.
To prevent catastrophic effects, some businesses might adjust their business models. Coca-Cola, for example, is considering making more of its beverages in plastic bottles instead of tin cans, according to a statement by CEO James Quincey in February.
Meanwhile, aluminium futures tumbled, nearing the $2,470 per tonne mark amid escalating US-China trade tensions. Steel rebar futures came under pressure around CN¥ 2,950 as tariffs continue to wreak havoc with supply chains.
On a positive note, lower prices in these metals may create opportunities in the derivatives market, allowing traders to reap some potential benefits from the downtrend by going short.
Lately, around the cryptosphere: Truth Social BTC ETF
While supply chain managers and big US manufacturers grapple with higher aluminium and steel prices, crypto pundits are chewing on what may potentially be the next big thing in crypto – the listing of Truth Social BTC ETF.
On June 3, NYSE Arca exchange filed for the listing of the Truth Social BTC ETF with the SEC, on behalf of crypto asset management firm Yorkville America Digital, a partner of Trump Media & Technology Group, owner of Truth Social.
Before his return to the White House to avoid a conflict of interest, Trump moved his shares into a trust now controlled by his son, Donald Trump Jr., as the new majority owner.
The new BTC ETF will track the price of Bitcoin (+1.72% YTD). No management fee or ticker was disclosed in the filing, except for the proposed custodian – Foris DAX Trust Company, which is also the custodian of Crypto.com’s assets.
Reportedly, a SEC approval of the Truth Social BTC ETF would blur the line between politics and finance. If approved, the new BTC ETF will enter an ultra-competitive arena currently populated by 11 heavyweights, including BlackRock’s iShares Bitcoin Trust ETF (IBIT) with nearly $69 billion in AUM.
What’s in it for you? BTC hit an all-time high at $106,000 on Thursday, as crypto bulls regained confidence in the digital asset, before it pulled back to $104,822. Will it recapture the higher ground? There’s only one way to find out: trade.
Risk Warning: Contracts for Difference (CFDs) are complex financial instruments and may not be suitable for all investors. Trading CFDs involves substantial risks of losing your invested capital. It’s important to note that CFDs are a leveraged product, which means they can magnify both potential gains and losses. It’s crucial to understand that CFD traders do not possess ownership or rights to the underlying assets.
