Nonfarm Payrolls Awaited as Dollar Steadies
The Non-Farm Payroll report is expected to show an addition of 170,000 jobs in January, keeping the unemployment rate at 4.1%. Meanwhile, the Japanese yen reached a nine-week high as markets anticipate further interest rate hikes by the Bank of Japan. In Europe, shares remained flat after closing at a record high in the previous session.
Key Data Out Today
- Eurozone:
- ECB’s De Guindos Speech (08:45 GMT) – Investors will watch for any policy clues.
- United Kingdom:
- BoE’s Pill Speech (12:15 GMT) – The Bank of England’s Chief Economist may provide insight into future rate decisions.
- Canada:
- Net Change in Employment (Jan) – Expected at 25K, significantly lower than 90.9K previously.
- Unemployment Rate (Jan) – Expected to tick up to 6.8% from 6.7%, signaling potential labor market cooling.
- United States:
- Nonfarm Payrolls (Jan) – Forecasted at 170K, down from 256K, with labor market resilience in focus.
- Unemployment Rate (Jan) – Expected to remain at 4.1%.
- Average Hourly Earnings (MoM & YoY, Jan) – Expected at 0.3% MoM, unchanged from the previous reading, and 3.8% YoY.
Commodities
- Oil:
- WTI crude is up 0.92% at $71.26, while Brent crude is up 0.81% at $74.89. However, both benchmarks are still set for weekly losses, with concerns over slowing demand and global trade risks weighing on prices.
- Gold & Silver:
- Gold has gained 0.28% to $2,865.79, reflecting ongoing investor demand for safe-haven assets ahead of key data releases.
- Silver has climbed 0.38% to $32.34, continuing its 3.40% weekly gain as markets assess inflation expectations.
Currency Movements
EUR/USD – 1.0398 (+0.14%)
- The euro is holding gains but remains vulnerable ahead of the ECB’s De Guindos speech, which could hint at future monetary policy direction.
GBP/USD – 1.2465 (+0.25%)
- The pound is trading higher ahead of BoE’s Pill speech, with traders looking for clues on the Bank’s next rate move.
AUD/USD – 0.6295 (+0.21%)
- The Aussie continues to recover amid a broader risk-on sentiment, though weakness in commodity prices may limit upside.
NZD/USD – 0.5688 (+0.23%)
- The Kiwi is modestly higher, tracking the Aussie’s move, but remains pressured by global risk sentiment.
USD/JPY – 151.77 (+0.24%)
- The yen has strengthened to a nine-week high, as expectations for a BOJ rate hike continue to rise.
USD/CNY – 7.2886 (-0.01%)
- The yuan is stable, though China’s economic outlook remains a key factor influencing the currency.
USD/CHF – 0.9057 (+0.07%)
- The Swiss franc is steady, with the dollar maintaining strength ahead of U.S. payroll data.
USD/CAD – 1.4308 (+0.01%)
- The loonie is flat ahead of Canadian employment data, which could trigger volatility if the job numbers surprise.
USD/MXN – 20.4763 (+0.08%)
- The peso is slightly weaker, reflecting cautious sentiment in emerging markets.
USD/INR – 87.36 (-0.25%)
- The Indian rupee is firmer today, reflecting weaker dollar momentum and expectations for stable RBI policy.
Market Outlook
- U.S. nonfarm payrolls will be the primary market driver today. A strong report could reinforce expectationsthat the Fed will keep rates higher for longer, supporting the dollar and bond yields. A weaker print could increase bets on rate cuts, weighing on the dollar.
- The Japanese yen is gaining traction as traders position for potential monetary tightening from the Bank of Japan.
- Gold remains firm, signaling that investors are hedging against uncertainty, while oil markets struggle to find direction amid demand concerns.
- BoE’s Pill speech could provide additional insight into the UK’s monetary policy outlook, influencing GBP movement.