Without a shadow of the doubt, the main event of the day is the Non-Farm Payrolls print for the month of June, which is going to showcase the strength of the US labour market and provide valuable clues for policymakers’ projection models.
According to market forecasts, the unemployment is expected to uptick by a tenth of a percent to the 4.3% level, average hourly earnings are seen standing still at the 3.9% level, whereas job growth is expected to soften further, with only 111k new jobs being created compared to last month’s upwardly revised 139k reading.
Evidently, employment growth in the US has showcased signs of slowdown in recent months yet the relative underperformance has not been branded as severe enough to push the Federal Reserve into slashing rates quickly.
Even though Wall Street’s projections lean towards pessimism, the data will ultimately tell whether the impact of trade and fiscal policies took a toll on the employment market of the world’s largest economy.
Economists are also flagging the possibility for a wide margin of error in regards to today’s release, extrapolating from the mixed results showcased by the JOLTS jobs openings and ADP non-farm employment report seen earlier this week.
Digesting the results, market participants will then ponder what will the Fed’s response be and whether the central bank will move quicker than originally signalled if the NFP print showcases a larger than expected weakness.
A larger than expected slowdown in job creation will most likely weigh on the dollar and on the contrary gold may find support and rise, by inflows from investors that seek safety.
Technical Analysis
Gold Chart – Gold gyrates around the $3350 area ahead of NFP print
Resistance: 3420 (R1), 3500 (R2), 3600 (R3)
Support: 3300 (S1), 3210 (S2), 3140 (S3)
