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What to look out for in the US jobs report later today?
Information is not investment advice
Ichimoku Kinko Hyo
EUR/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
XAU/USD: Gold facing a further appreciation above 61.8% retracement area.
US Market View
A strong headline number plus solid readings in wages and the unemployment rate will no doubt provide an added lift to the dollar, after having seen such solid momentum already this week - even stretching key technical levels over the past few days. But a strong headline number coupled with poor wages growth will make for a more interesting market reaction in the aftermath. The Fed has brushed aside rising inflation as temporary, yet they stepped up rate projections in their last meeting in June. As such, one can argue that there can't be lasting inflation without wages and that may make the figure a more important detail to pay attention to than the payrolls number itself as well as the unemployment rate.
U.S. stocks are seen opening marginally higher Friday, but firmly range-bound as the market awaits the closely-watched nonfarm payrolls report. The main equity indices all saw strong gains in the first half of the year as vaccinations allowed the economy to reopen against the backdrop of massive levels of monetary and fiscal stimulus. The main focus Friday will be on the NFP release, at 8:30 AM ET (1230 GMT), with the Federal Reserve looking for a significant recovery in the U.S. labor market before considering reining in its ultra-easy monetary policy.
Expectations at the start of the week were for 700,000 jobs to have been filled last month, up from 559,000 in May. That said, both ADP and weekly initial claims were stronger than expected, so expectations may have now risen.
Oil prices surged on Thursday after OPEC+ failed to agree to increase oil output. Both oil benchmarks surged more than 2% and are holding onto the lion’s share of those gains in trading so far today. Across the week, oil prices are set to book gains of 1.5% in the sixth consecutive week of hikes.
After hitting a two-month low earlier in the week, gold is rebounding, extending mild gains for a third straight session. Nervousness surrounding the rapid spread of the Delta Covid variant and its potential economic impact has offered support to the safe-haven precious metal.
USA Key Point
- OPEC+ reportedly not yet able to resolve standof
- USD/CAD on the fence ahead of US jobs repor
- Eurozone May PPI +1.3% vs +1.2% m/m expecte
- 10-year Treasury yields continue to drift below 1.50% ahead of payrolls dat
- European equities open slightly higher to start the da
- EUR/USD continues to flirt with drop below post-FOMC lo
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