U.S. Stocks Set To Open Lower After Disappointing Continuing Jobless Claims Report

European Central Bank Decided To Increase Pandemic Emergency Purchase Programme by 600 Billion Euros

Asset-buying programs are the main driver behind the current market rally so traders watch the developments on this front very closely.

The European Central Bank was expected to increase its Pandemic Emergency Purchase Programme (PEPP) by 500 billion euros but exceeded expectations and announced an increase of 600 billion euros.

At this point, PEPP totals 1.35 billion euros and is set to run through at least the end of June 2021.

This decision may serve as a material positive catalyst for the world markets and put additional pressure on the U.S. dollar which has been in a downside trend since the end of May.

Gold Stays Above $1700 Per Ounce

The news about additional money-printing from the European Central Bank may help the precious metal segment which has recently paused its rally as optimism prevailed in the world markets.

Gold managed to stay above $1700 per ounce and may be positioned for more upside in case the stock markets stop gaining ground on a daily basis. Gold looks like an increasingly attractive alternative to the U.S. dollar as a safe haven asset for those who want to hedge the risks of a downside move in the equity markets.

From a long-term point of view, the unprecedented monetary stimulus delivered by central banks all over the world is a bullish catalyst for precious metals.

Continuing Jobless Claims Increase To 21.5 Million

Initial Jobless Claims report showed that 1.9 million Americans filed for unemployment benefits in a week, down from 2.1 million in the previous report. The number is a bit higher than the analyst expectations of 1.8 million but highlights the downside trend in new applications for unemployment benefits.

Continuing Jobless Claims unexpectedly increased from 21 million to 21.5 million. Analysts expected that Continuing Jobless Claims would total 20 million. The sudden uptick in Continuing Jobless Claims could serve as a downside catalyst for the market as it shows that people who lost their jobs continue to experience difficulties with finding new ones.

S&P 500 futures are pointing to a lower open after the employment reports as negative data on Continuing Jobless Claims offsets the optimism about the new asset purchase program from the European Central Bank.

For a look at all of today’s economic events, check out our economic calendar.