Financial markets are on edge ahead of the US nonfarm payrolls report due out later today.
Traders are turning their attention away from the tariff issue that has dominated market sentiment, and are now awaiting fresh clues on the direction of interest rates by the Federal Reserve (Fed).
If the jobs figure is lower than expected, expectations for a rate cut could strengthen. Conversely, if the data shows strong job growth, expectations for a rate cut could fade.
Economists are expecting around 175,000 new jobs to be added in the latest report. At the same time, other data released on Thursday showed an increase in initial jobless claims, although labor productivity remained stable.
In addition to the headline jobs figure, investors will also be watching for any revisions to previous employment data, but they are not expected to drastically change the overall picture of the labor market.
If the report shows job growth in the 170,000 to 200,000 range, the market reaction is expected to be moderate.
However, if the figure is significantly different from expectations, the market movement could be more pronounced, if the figure is higher than expected, hopes for a rate cut may diminish, while a much lower figure could increase concerns about a slowdown in the labor market.
Gold & Oil Prices Move According to Market Sentiment
In commodities markets, gold prices rebounded after a slight decline on Thursday, snapping a six-session winning streak.
Meanwhile, crude oil prices also rose after a decline the previous day. Pressure from tighter sanctions on Iran continues, but President Donald Trump's recent statements emphasizing efforts to lower crude prices have weighed on the market.
Yen Weakens as US Dollar Loses Momentum
The Japanese yen fell against the US dollar, snapping a five-day streak of gains. While dovish statements from Japanese policymakers have provided some support for the yen, the US dollar's momentum is now waning.
With central bank policy changes and increasingly complex global economic factors, currency markets are expected to continue to experience volatility in the near future.
All eyes are now on today's US jobs report, which could be a determining factor for the direction of monetary policy and overall market sentiment.
In a constantly changing market environment, traders need to remain vigilant and make smart trading decisions based on current economic data.
