7 July Economic News
Crude oil has remained strong due to declining stockpiles and positive US economic indicators. Market participants have reassessed the level of hawkishness from the Federal Reserve. If the US non-farm payrolls data exceeds expectations, there is a possibility of WTI crude oil prices rising.
The Japanese Yen has been strengthened by an increase in wages in Japan, leading to price setups for the USD/JPY, EUR/JPY, and AUD/JPY. The USD/JPY appears to be overbought, but the uptrend has not yet reversed. The EUR/JPY is maintaining its gains after a recent bullish break. However, the AUD/JPY rally appears to be losing momentum.
Gold prices (XAU/USD) are facing the possibility of a significant decline as the NFP day approaches. The price of gold is currently testing the key psychological level of $1900. It remains to be seen whether the upcoming NFP report will contribute to a sustained downward movement in gold prices. Following the release of ADP and ISM Services data, the US 2Y yield has once again surpassed 5%.
The US has seen positive economic data, particularly in the labor market and services sector, which may lead to a more aggressive approach from the Federal Reserve. The ADP report and ISM services purchasing managers index both showed strength, indicating a robust labor market. However, inflation progress is being challenged by persistent prices in the services sector, causing US Treasury yields to rise. The S&P 500 may face resistance and investor sentiment could change. Asian stocks may open lower due to negative sentiment from Wall Street and concerns about China’s recovery. Japan’s economic calendar showed a surprising increase in average cash earnings, potentially leading to a policy shift by the Bank of Japan. However, real wages are still decreasing and household spending has declined sharply. The USD/JPY is consolidating around an important level and its movement is closely tied to the US-Japan 10-year yield differentials. The USD/CAD has shown resilience.
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