Markets muted on Good Friday and ahead of NFP payroll data

The labor market is expected to tighten further

By Nadia Elbilassy | @Nadia Elbilassy | 5 July 2023

Midday Market update
  • Oil prices achieves third weekly gains, WTI hangs on 80 dollars

  • US Job data are expected to come in today with 228K reading vs 311K previous

  • The dollar index stabilizes below 102.00

Could todays labor market data trigger the dollars downside further?

The dollar is found stabilizing below 102, ahead of US job data which will be a catalyst for the greenback’s movements in the coming period. As markets price in a 53% rate hike in May according to CME.

Due to largely disappointing data and particularly after Jerome Powell’s latest speech that economic data will be the key driver to the bank's monetary policy direction. Which is why today’s labor market data is of great importance. Any further signs of slowing growth could contribute to further declines for the USD.

The labor market is expected to add 228,000 jobs in March, compared to 311,000 with that of February, with unemployment rate is expected to remain stable at 3.6%, and wages to rise by 0.3% on a monthly basis.

WTI hangs on 80 dollars

Oil noted its third weekly gains after OPEC+ surprised the market last weekend with more production cuts. Brent crude closed 0.15% at $85.12 per barrel on Thursday, while WTI rose 0.11% to $80.70 per barrel overnight. As oil markets remain closed for Good Friday Holiday.

Both benchmarks jumped more than 6% this week after OPEC+ voluntary oil production cuts of 1.16 million barrels per day from May until the end of this year. Whilst stating that precautionary measures are aimed at supporting the stability of the oil market. Russia also said that the 500,000 barrels per day reduction it applies from March to June will continue until the end of the year.

The recent move by OPEC+ in addition to the two million barrels per day production cut the group introduced in October. And the fall of US crude inventories fell by 3.7 million barrels last week, also supported oil prices.