Mixed bag for us economic data

Stock Market

Following a recent dip, US indices managed to regain some ground after the Federal Reserve opted to maintain rates as widely anticipated. However, the Fed hinted at a continued hawkish stance on rates despite the absence of substantial progress on recent inflation metrics. This left investors grappling with the prospect of prolonged higher rates, which dampened risk appetite and curtailed intraday market gains.

In the realm of economic indicators, US jobless claims came in at 207k, slightly below the 211k expected, with continuing claims also showing a decline. Conversely, unit labor costs saw a sharper increase than expected, up 4.7% year-on-year, indicating potential inflationary pressures. Meanwhile, productivity figures fell short of expectations, registering a modest 0.3% month-on-month increase.

The market response to these indicators was mixed. Despite the positive trend in jobless claims, the surge in unit labor costs raised concerns about inflation, while the underwhelming productivity data added to the uncertainty. Consequently, the US dollar experienced a slight weakening following the release of the data.

Commodities

Gold witnessed a continued decline, breaching the $2,290 level in the latter half of Thursday's trading session. This downward trajectory was influenced by a rebound in the benchmark 10-year US Treasury bond yield following the release of US economic data, with investors positioning themselves cautiously ahead of the upcoming US jobs report.

The oil market experienced notable turbulence, with a sharp 5.5% decline over just three trading days. WTI Oil's attempted recovery towards $80 per barrel was thwarted by positive developments emanating from the Middle East, underscoring the volatility inherent in the oil market amidst geopolitical uncertainties.