What's next for commodity prices as US jobs data takes centre stage [Video]
|Another day and another highly anticipated money making opportunity. That’s one of the most lucrative trends of the current financial climate that we find ourselves in right now.
Following Fitch’s surprise move earlier this week to strip the United States of its triple A rating – traders have now turned their attention to the next big market-moving event brewing on the horizon: Friday’s U.S Employment Report.
There will be a huge focus on Friday’s data, especially with growing pressure piling on Federal Reserve to end their aggressive tightening cycle, much sooner than policymakers would prefer.
Friday’s Non-Farm Payrolls report could provide a crucial piece to the increasingly complicated puzzle that is the U.S economy and its long-anticipated slide into recession.
Economists expect that Non-Farm Payrolls increased by 200,000 in July, a number that would be the smallest gain since December 2020, while unemployment is projected to hold steady at 3.6%. Last month saw a gain of 209,000 and the year-to-date total is around 1.7 million.
While slower job growth might fit the narrative that the U.S economy is headed for a contraction, other critical macro-data, including GDP figures, productivity and consumer spending, recently have been surprisingly strong.
That could leave Friday’s payrolls number as a key arbiter for whether the economy is headed for a downturn and if the Federal Reserve needs to keep hiking interest rates to control inflation that is still running well above the central bank’s desired 2% target rate.
Expectations are running high that this will most likely be a report that has a little bit for everybody – whether your view is leaning towards a hard landing, soft landing or no landing at all, which ultimately opens the door to new and exciting opportunities ahead.
Wages also will be a huge focus. Average hourly earnings are expected to increase 0.3% for the month and 4.2% from a year ago, which would be the lowest annual rise since June 2021.
Altogether, traders will be looking for the data to confirm that the economy is slowing enough for the Federal Reserve to ease up on its historic monetary policy tightening campaign and finally announce an end to their 17-month-long interest-rate hiking cycle, which commenced in March 2022.
It goes without saying that Friday’s U.S jobs report will either make the Fed's decision on future rate hikes much easier or much more difficult. As savvy traders know, regardless of whether the data meets, beats, or misses expectations – the outcome is guaranteed to be a license to print money, which traders will not want to miss out on!
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
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