Investors await US nonfarm payrolls

Recent economic signals, including lower US Treasury yields and a weakening Dollar, have fueled expectations of potential Fed rate cuts

By Farah Mourad | 5 July 2024

Market open
  • Focus remains on Eurozone retail sales and Canada's employment change data releases

  • Moderate gains in gold prices

  • WTI and Brent experienced marginal declines

Market Sentiment and Economic Indicators

Investors are exercising caution ahead of key economic data releases, particularly the highly anticipated US Nonfarm Payrolls (NFP) report. This report holds significant weight in assessing the health of the US labor market and could provide crucial insights into future Federal Reserve monetary policy decisions. Expectations of an impending Fed rate cut gained traction following recent economic indicators signaling weakness, including lower US Treasury bond yields and a depreciating US Dollar.

The Federal Open Market Committee (FOMC) minutes from the June meeting underscored concerns over slowing US economic growth, reinforcing expectations of potential rate cuts in response to economic softness. This sentiment was echoed by disappointing ISM services data, which heightened speculation of accelerated monetary easing measures to stimulate economic growth.

Upcoming Economic Events

Market attention remains focused on forthcoming economic releases, including Eurozone retail sales data and Canada's employment change figures, slated for later in the trading day. These reports are poised to provide additional insights into regional economic health, potentially influencing currency and commodity markets.

Gold

Early European trading on Thursday saw gold prices, exhibiting a modest upward trajectory, though momentum was tempered following a recent peak. The precious metal continues to navigate amidst robust bullish sentiment in global equity markets, which traditionally diminishes demand for safe-haven assets like gold.

Energy Commodities

Energy futures such as Natural Gas (NATGAS) and crude oil (WTI, Brent) witnessed marginal declines.