Market eye BoE decision and US job data

With the BoE rate decision, Eurozone data releases, and ongoing geopolitical developments shaping market sentiment, volatility remains elevated across asset classes. Investors will be watching for confirmation of central bank policy shifts and economic trends, setting the stage for potential market opportunities in the sessions ahead.

Currencies

The British Pound’s three-day winning streak has come to a halt, with GBP/USD stabilizing around 1.2490 during Asian market hours. Investors are exercising caution ahead of the Bank of England’s (BoE) monetary policy decision, where a 25-basis-point rate cut to 4.5% is widely anticipated. The prospect of policy easing could apply downward pressure on the Sterling, as traders recalibrate expectations for the UK’s economic trajectory.

The Euro is struggling to maintain momentum after two consecutive days of gains, with EUR/USD dipping to 1.039 in early trading. Market participants are closely monitoring Eurozone Retail Sales data, set for release later in the day, which could provide insight into consumer demand and influence the European Central Bank’s future policy stance.

Commodities

Gold prices remain in consolidation mode, holding near all-time highs as the European session approaches. The yellow metal continues to benefit from persistent US-China trade tensions, along with expectations that the Federal Reserve may extend its rate-cutting cycle into 2025. A decline in US Treasury yields further supports gold’s appeal as a safe-haven asset.

That said, a mild recovery in the US Dollar and improved risk sentiment in equity markets are acting as temporary headwinds for gold’s upward momentum. However, the broader outlook suggests that any short-term pullback could be seen as a buying opportunity, with the trend still favoring the upside.

WTI Crude Oil

Crude oil prices are under mild pressure, with West Texas Intermediate (WTI) trading around $71.00 during early Asian hours. The decline comes as US crude stockpiles surged by 8.664 million barrels last week, far exceeding the expected 3.2 million-barrel build. This signals weaker demand and adds to concerns over global economic uncertainty, particularly amid renewed US-China trade tensions.

US Labor Market Update: Jobless Claims in Focus

The latest US labor market data provides fresh insights into employment conditions:

• Initial Jobless Claims for the week ending January 31 expected to be at 213K, slightly above the previous 207K.
• Continuing Jobless Claims expected to go up to 1.87M, compared to the previous 1.858M

These figures will be closely scrutinized for their impact on Federal Reserve policy expectations, as policymakers assess whether labor market softness warrants additional rate cuts in the months ahead.