Markets poised for non-farm payrolls later today. The charts have been relatively calm over the last few days but all that could change in a few hours in the event of surprise US employment data. The headline figure is expected to come in at 160k new jobs, with unemployment remaining at 4.2%.
Gold managed to get some momentum going this week, closing higher three days in a row and reaching $2,670 an ounce on Thursday. The precious metal remains over $100 below its record high set in October of last year.
The rise came despite a renewed show of strength in the Dollar, which has also clawed its way higher over the last three days, pushing the DXY to 109.1 by yesterday’s close. The push contributed to significant woes for the Pound Sterling, which plunged below $1.23 on Thursday, a 14-month low for the currency. Bond traders will be aware that yields on UK gilts have been rising substantially in recent months. The 30-year gilt in particular has seen rates rise above 5.4% this week, the highest since 1998. The selloff in gilts, coupled with a weakness in the Pound, reflects a lack of fiscal confidence in the UK government. Stagnant growth, sticky inflation and more expensive debt servicing combine to paint a rather bleak tableau. Across the Channel, things are not looking much brighter for the Euro. The common currency remains above parity but is facing a largely similar threat. The Greenback has reasserted itself and other currencies have every right to be fearful.
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