A state of calm dominates the global markets

Gold profits take a hit after reaching new peak

By Raed Alkhedr | @raedalkhedr | 5 July 2023

  • The dollar index remains stable near 101.90

  • Expectations of oil prices reaching $100 per barrel continue to grow

  • Stock markets await the release of US job data tomorrow

US Dollar stabilizes ahead of tomorrow's US Job data

The US dollar remained stable during today's trading after profit-taking operations dominated it at the end of yesterday's session, bringing the dollar index back near levels of 101.90. This comes at a time when caution prevails in global markets as they prepare for US job data tomorrow. Federal Reserve Chairman Jerome Powell's recent statements have confirmed that economic data will be the deciding factor in the Fed's future direction.

Yesterday, the US dollar witnessed strong declines as disappointing data continued to emerge, including a contraction in the manufacturing sector, slowing growth in the service sector, and a slowdown in private sector job additions according to ADP.

US stock markets show stability as investors await release of Key job data

Stock markets remained stable during Thursday's trading as investors prepare for the release of US job data set to be released tomorrow. Futures contracts associated with the Dow Jones Industrial Average gained 13 points and were traded near stability, while futures contracts for the S&P 500 index changed slightly. However, futures contracts for the Nasdaq-100 index fell by 0.2%.

These movements come at a time when investors are digesting ongoing disappointing economic data in the United States. The market has become increasingly concerned about the following data and is attempting to determine the Fed's future direction.

On Thursday, the two-year Treasury bond yield, the most sensitive to monetary policy, fell by 3 basis points to 0.73%. According to CME Group's tool, expectations of interest rate stability in the May meeting reached over 55%.

Oil prices stabilize as expectations of $100 per barrel increase

Oil prices remained stable during today's trading, but are on track to achieve a third consecutive weekly gain as OPEC+ moves to reduce production in addition to concerns about a decrease in US oil inventories. Brent and US crude oil have risen by more than six percent this week, with Brent crude oil stabilizing near levels of $85 per barrel, while West Texas Intermediate crude oil stabilizes near levels of $80.50 per barrel.

Despite oil prices remaining stable for the third consecutive day, expectations of prices rising to $100 per barrel still loom on the horizon and are putting pressure on global economic expectations and inflation increases in the future.