Silver investments: the worst jobs report ever? “Small non-farm” fear first sound alarm! Silver continues to bounce!

Silver continued to rally on Wednesday, extending gains to as much as 1 per cent, and is now back above the $15 mark as markets focus on the us ADP jobs data later in the day.

Silver ended a three-day losing streak last week, briefly testing the 15-point barrier and moving closer to the key 50-day moving average.

As of 10:59 Beijing time on May 6, more than 3.72 million COVID 19 cases have been confirmed globally, of which 3,727,802 have been confirmed and 258,338 have died, according to real-time data update website worldometers.

Among them, the total number of confirmed COVID 19 cases in the United States exceeded 1.23 million, with 1,237,633 cases, and the total number of deaths exceeded 70,000, with 72,271 cases.

Risk sentiment also returned as several countries and U.S. states eased restrictions imposed during a novel coronavirus outbreak in an attempt to restart their economies.

A number of hard-hit countries, including Italy, and some U.S. states, including California, this week began tentative easing of the blockade, raising hopes of an economic recovery.

“We’re starting to see some states restart and we’re starting to see some activity pick up,” said Paul Nolte, portfolio manager at Kingsview Investment Management. We are probably in the worst of times and things are going to improve from now on.”

The huge us service sector shrank in April for the first time in nearly a decade and a half, to 41.8 from 52.5 in March, according to data released on Tuesday, dragged down by tough government measures to slow the spread of the disease.

Kristina Hooper, chief global market strategist at Invesco, said: “we’ve certainly seen some negative data, but for the most part, the market has learned to take them with a shrug.”

Investors are focusing on labor market data this week, with the April jobs report due on Friday.

Before that, today’s market will be the first “small non-farm” ADP employment data test. At 20:15 Beijing time on Wednesday, the U.S. ADP employment data for April will be released. The market expects the number of ADP jobs to drop by 20.5 million in April, compared with a previous decline of 27,000.

Non-farm payrolls are expected to be the worst ever, with 22m jobs likely to be lost and the unemployment rate likely to soar to 16 per cent.

More than 30 million americans have applied for unemployment benefits in the past six weeks, and Friday’s non-farm payrolls data could shed more light.

“Attention will shift to the scale of the damage caused by the blockade,” said strategists at ING. On top of that, unemployment data will be released this week. Our team expects the April non-farm payrolls report to shed 21 million jobs, causing the unemployment rate to surge to 16%. “The may report could see a further 12 million jobs lost and the unemployment rate rise to 22 percent.”

Technical analysis:

The dollar

On the daily chart, the dollar index in three consecutive days of gains after the high consolidation, trading around 99.80, successfully on the key 50 day average level. From the technical point of view, MACD green kinetic energy column weakened, RSI index hovering around 50, KDJ random index approaching 50 level, there is rebound space.

On the four-hour chart, the dollar index is still in a strong rise since 98.77, has broken through the 100 and 50 periods of the average, 200 periods of the average above the pressure. MACD red kinetic energy column began to weaken, KDJ random index hit the overbought level, short – term may be a small correction.

silver

On the daily chart, silver continues to build on last day’s gains and is now above the $15 level, moving closer to the key 50-day daily resistance. MACD red kinetic energy column close to disappear, KDJ random index fell below the 50 level, short-term attention can break through the average resistance.

On the 4-hour chart, silver is on the offensive, testing the key 50-session moving average of 15.05, with further resistance above $15.16. MACD red kinetic energy column continued to expand, KDJ random index to rise above the 50 level, short – term is expected to continue to rebound.

fundamentals Positive factors :

  1. According to statistics from real-time information and data update website world meters, as of 10:59 Beijing time on May 6, more than 3.72 million COVID-19 cases have been confirmed globally, of which 3,727,802 cases have been confirmed and 258,338 cases have died and more than 258,000 cases have been confirmed.
  2. We are in the midst of a recession, but the economy may begin to recover in the second half of the year, federal reserve vice-chairman chuck Clarida said. We are experiencing the most severe contraction in economic activity and a surge in unemployment, which will soar to its highest level since 1940.
  3. According to an internal document obtained by the New York Times, as of June 1, the daily death toll will reach about 3,000, nearly double the current figure of about 1,750. By the end of the month, about 200,000 new cases will be confirmed every day, up from about 25,000 now. In addition, an influential coronavirus model, often cited by the White House, now predicts that novel coronavirus will kill 134,000 people in the United States, nearly double previous estimates.
  4. In an interview with the Wall Street Journal, st. Louis federal reserve bank President James Bullard said he is concerned about the potential for a recession if the shutdown lasts too long and the problems of restarting the economy are not handled well.

Fundamental negative factors:

  1. U.S. vice president Mike Pence said the White House is discussing disbanding the task force on the new outbreak and that the response could be transferred to FEMA.
  2. According to the New York Times, US President Donald Trump is considering tax cuts for businesses in his next economic stimulus bill. Mr. Trump said payroll and capital gains taxes should be considered, and liability guarantees and business tax breaks for restaurants and entertainment venues must be considered.
  3. The euro fell after Germany’s constitutional court ruled that the Bundesbank must stop buying government bonds if it cannot prove it is necessary.
  4. The U.S. Treasury said Monday it plans to sell nearly $3 trillion in debt in the second quarter of 2020, the highest quarterly issuance on record.

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