The economic calendar on May 5 is quite loaded with events. First off, New Zealand posted a lower than expected unemployment rate in the first quarter of 2021 at 4.7%, backed up by a positive employment change reading for the same period.
In Europe, Spain pleasantly surprised investors with a services PMI of 54.6 in April, much better than expected. However, Germany disappointed with its own reports, with the services PMI failing to meet the forecast and dropping to 49.9 (numbers below 50 indicate economic contraction), and the composite PMI doing the same at 55.8. The eurozone-wide composite PMI rose slightly to 53.8, despite the problems in Germany.
We expect a ton of reports from the United States later in the day. Among these, the ADP employment change reading and several speeches by Federal Reserve officials will be the highlight.
Data from the United States is being followed with an especially keen interest by investors at present after US Treasury Secretary Janet Yellen slipped up yesterday and admitted that a rate hike might be necessary to balance the economic recovery process, confirming the suspicions of some that a hike before 2023 might become a reality. So far, the Federal Reserve has denied it is considering tightening the monetary policy in the next two years.
Yellen’s comments yesterday caused somewhat of a crash in US stock markets, but today we see all major indices recovering, having absorbed any initial shock following that statement.
Today the earnings season continues, with big names like PayPal, General Motors, and Hilton reporting.
Cryptocurrencies are also on the rise today, especially Elon Musk’s beloved Dogecoin. Tesla’s CEO is set to host an episode of Saturday Night Live this week and many anticipate his jokes to involve (and boost the reputation of) cryptocurrencies, especially Dogecoin, the meme cryptocurrency.
On the other end of the spectrum is India, where things remain tense and serious. The coronavirus pandemic continues to rage there - the country has now had over 20.6 million cases. Daily infection rates have dropped below their record highs of 400,000, but remain close to that number.
In response, the Reserve Bank of India has to loosen its monetary policy to help provide the proper funding for healthcare necessities. The Indian rupee has weakened slightly as a result.
