Dubai TV Interview, April 5, 2021

In an interview with Dubai TV, Director of Research and Development at Noor Capital, Mohamed Hashad takes a closer look at the markets.

US

The US jobs report (NFP) came as a surprise, contrary to expectations, as the US economy added 916 thousand jobs compared to expectations of 652K, with unemployment levels continuing to decline to the lowest level in a year, but the average wages are still the obstacle to a series of recovery of the US economy, as it decreased by only 0.1%. The overall performance of the US economy, especially the employment sector, indicates an increased pace of recovery in the second half of this year if the numbers remain on the strong side. The good numbers from the NFP report had a big impact on the US markets, with the Dow Jones above 33 levels and the S&P for the first time crossing the 4000 barrier, but the Nasdaq index is lagging behind as higher Treasury yields pressure technology stocks. The markets benefited from a $ 2 trillion package from the Biden administration, which was devoted to infrastructure to support the economy after the repercussions of the Coronavirus, but the negative thing would raise taxes by about 28%.

Gold

The positive performance of the US dollar was supported by higher US Treasury yields. The investor considers Treasury bonds as security guaranteed by the Treasury that gives a better return than gold and thus increases the price of gold, which reduces the attractiveness of holding the yellow metal and the continued rise of the US dollar with strong data. All of this puts pressure on gold, which is trying to maintain 1,700 levels, but if this level is broken, this will lead to more negative pressures on gold prices in the coming period.

Oil

I think that oil levels will remain between 65 and 70 dollars during the coming period, which is a satisfactory price for the consumer and the source. We witness in the last OPEC+ meeting the agreement to increase production by 350 thousand barrels per day starting from next month with an increase of 450 thousand barrels per day starting from July in addition to Saudi Arabia reported reducing the production limit, which was set in February, by about one million barrels per day.