Markets are in a temporary calm ahead of critical Nonfarm Payrolls and after the dollar surged in response to a trio of upbeat US figures. Gold is on the back foot amid rising Treasury yields Bitcoin struggles after Musk’s comments Canada’s jobs report and virus headlines are also eyed. 

Strong US data: ADP’s private-sector labor market figures jumped by 978,000 in May, far better than expected and Unemployment Claims tumbled below 400,000. Perhaps most importantly, the ISM Services Purchasing Managers’ Index beat estimates with 64 points, showing strength in America’s largest sector.

Markets wary of a booming service sector ahead of payrolls: It all comes down to the Fed

The Prices Paid component hit the highest since 2005, and it is the latest piece of evidence that inflation is rising. The Federal Reserve seems be taking baby steps toward tapering and that is perhaps the strongest upside driver of the dollar. Jerome Powell, Chair of the Federal Reserve, is set to speak ahead of the jobs report, but on climate change and not on monetary policy. 

Time for a taper tantrum? Three reasons why the dollar is set to extend its gains

Nonfarm Payrolls: The economic calendar is pointing to an increase of 664,000 jobs in May after the disappointing 266,000 in April. Substantial revisions and skewed figures due to seasonal adjustments may provide an extra layer of confusion to markets. 

Canada also publishes its labor market figures, and a minor loss of jobs is on the cards in May, in the wake of a lockdown in April.

EUR/USD dropped to 1.21 and awaits a speech by European Central Bank President Christine Lagarde. GBP/USD slipped under 1.42, also amid concerns that the Delta COVID-19 variant would delay the UK’s planned reopening on June 21.

Gold has been hit hard by the upswing in returns on Treasuries, a side-effect of the dollar storm. The yieldless precious metal tumbled below $1,870. 

Cryptocurrencies: Tesla founder tweeted an emoji of a broken heart and put it aside Bitcoin. The influencer contributed to a sell-off in the granddaddy of digital assets. On the other hand, Dogecoin is supported by its imminent listing on Coinbase, one of the world’s largest exchanges. 

Virus: Cases in the US and Europe continue falling rapidly, while increases in infections in Asia are a source of concern. The Olympic Games in Tokyo are at risk.