The US labor market remains strong. Putin threatens the West again

On Sunday, Russian President Vladimir Putin warned that Russia would strike at unspecified targets if the West supplied Ukraine with longer-range missiles. He refers to Himars systems, which are capable of striking at a distance twice that of what Russia has in its arsenal. “If it now comes to rockets and they are supplied, we will draw conclusions from that and employ the weapons that we have in sufficient quantities to strike those facilities that we are not attacking so far,” Putin warned.

OPEC+ held another quick meeting late last week. The group agreed to increase production by about 50% more in July and August. However, analysts believe the group will not be able to achieve such a more aggressive supply increase over the next two months. If Saudi Arabia and the UAE were willing to produce above their target levels, it would be more helpful to the market, as they could offset shortages from other producers. But that is not happening.

On Friday, gold fell after data showed that US employers hired more workers than expected in May and maintained strong wage growth. The gold market remains uncertain as the Fed is on track to raise interest rates. Higher rates are pushing up government bond yields, hurting gold and silver prices.

Asian markets traded higher last week. Japan’s Nikkei 225 (JP225) gained 2.47% over the week, Hong Kong’s Hang Seng (HK50) added 2.11% over the week, and Australia’s S&P/ASX 200 (AU200) was up 0.78% over the week.

The Latest PMI data indicated that China’s service sector experienced further marked declines in business activity and new orders in May due to measures to contain the recent uptick in COVID-19 cases. That said, reduction rates were not as severe as those seen in April.

Reserve Bank of Australia (RBA) inflationary concerns intensified, necessitating an acceleration in the pace of tightening in June. Last month the RBA raised its interest rate from a record low of 0.1% to 0.35%. Economists expect this week’s increase to be at least another 25 basis points, or perhaps 40 or 50 basis points.

Australia said Sunday that a Chinese fighter jet made dangerous maneuvers, threatening the safety of one of its maritime reconnaissance aircraft over the South China Sea. Australia’s defense minister said the Chinese J-16 flew very close to the Australian aircraft and fired flares that hit the engines. There was no official response from Beijing.

Futures on gasoline (+10.13%), platinum (+8.2%), Brent oil (+4.51%), and copper (+4.03%) showed the biggest gains by the end of the week in the commodities market. Futures on lumber (-11.29%), wheat (-10.06%), corn (-6.4%), palladium (-3.93%), and natural gas (-2.15%) showed the biggest drops.