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All Eyes on July’s US Jobs Report

By:
Lukman Otunuga
Updated: Aug 4, 2019, 09:51 UTC

Today’s potential market-shaker will be the US jobs report for July, which should offer crucial insights into the health of the US labour market.

All Eyes on July’s US Jobs Report

With the Federal Reserve adopting a data-dependent approach in regards to monetary policy, today’s NFP report will garner extra attention. Markets expect the US economy to have gained 164K jobs in July, with average earnings steady at 0.2%, while the unemployment rate is predicted to drop to 3.6%.

While every piece of the US jobs report is of great importance, there will be a very strong focus on wage growth, as further signs of wages failing may fuel concerns over inflation remaining subdued, ultimately fueling speculation of more rate cuts to come. Investors are questioning whether the Federal Reserve will cut rates again following the confusion over the forward guidance in its latest July FOMC meeting. A disappointing US jobs report should strengthen the argument for lower rates in the United States – ultimately weakening the Dollar.

Commodity spotlight – Gold

Gold blasted higher on Thursday, rallying to levels not seen in two weeks thanks to US President Donald Trump’s tariff tweets.

The precious metal is positioned to appreciate further if the pending US jobs report disappoint market expectations. With unfavorable global conditions, renewed US-China trade tensions and Brexit drama denting appetite for riskier assets, Gold will most likely remain the prime destination for safety.

In regards to the technical picture, an intraday breakout above $1445 could encourage a move higher towards $1450 and $1470, respectively.

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About the Author

Lukman Otunuga is a research analyst at FXTM. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in the various factors affecting the currency and commodity markets.

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