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The US-Japan Trade Agreement officially comes into effect, focusing on non-agricultural employment reports
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Review]: The US-Japan Trade Agreement officially eouu.cnes into effect, focusing on non-agricultural employment reports". Hope it will be helpful to you! The original content is as follows:
On September 5, during the Asian session on Friday, spot gold trading around $3,542/ounce, gold prices fell on Thursday as traders took profit after a record rise. The focus is now turning to the US non-farm employment report to find new clues to the Fed's policy path; U.S. crude oil trading around $63.30/barrel, oil prices fell about 1% on Thursday to a two-week low as U.S. crude oil inventories unexpectedly increased last week, and the market expects OPEC+ oil-producing countries to raise their production targets at the meeting this weekend.
The US dollar rose slightly on Thursday, with market trends fluctuating this week, and investors focused on key employment reports released on Friday. Previous data showed that the labor market was softer, strengthening expectations for the Federal Reserve to cut interest rates this month.
Data released by the U.S. Department of Labor shows that the number of initial unemployment claims increased by more than expected last week, reflecting the continued cooling of the labor market. At the same time, the ADP National Employment Report showed that the growth rate of private jobs in the United States in August was lower than market expectations.
StateStreet's senior global market strategist in Boston said the market was volatile and investors tend to adjust positions before Friday's data was released rather than betting on the direction of the bet as there are still questions about the economy. ”
The U.S. dollar index rose 0.20% to 98.334, down the previous trading day. The team led by Goldman Sachs analyst Karen Fishman pointed out that if the non-farm employment report is stronger than expected, the U.S. dollar will usually strengthen across the board; if the data is less than expected, it may weaken. The analyst wrote in the report, “Given the downward trend of labor market risks and our expectations of the Fed’s more dovish, IWe recommend shorting the US dollar/JPY, with a target of 142 yen. ”
Several Fed officials recently said that weak job markets remain their main reason for supporting future rate cuts, which further boosts market expectations for a month’s rate cut. The Fed will hold a policy meeting from September 16 to 17.
According to CME’s FedWatch tool, traders currently expect the probability of the Fed’s rate cut this month to be close to 100%, higher than 87% a week ago.
In terms of bond markets, global long-term bond yields generally rise, reflecting investors’ concerns about the fiscal situation of major economies such as Japan, the UK and the United States.
U.S. Treasury yields fell, with two-year Treasury yields falling by 1.8 basis points to 3.594%; 10-year Treasury yields fell by 3 .1 basis point, to 4.18%. The highly-watched 30-year treasury bid was successfully eouu.cnpleted on Thursday.
Asian market
Phiople's central bank: Inflation is expected to be on the rise, but it will be strictly controlled within the target range of 3.0% + 1.0 percentage points.
European market
European market
Retail sales in the euro zone fell -0.5% month-on-month in July, and greater than expected -0.2% month-on-month. Food, beverage and tobacco sales fell -1.1%, while automobile fuel purchases fell -1.7%. Non-food sales rose only slightly by 0.2%, almost offsetting the overall weakness.
Across the EU, sales fell -0.4% month-on-month . The differences between member states were significant: Croatia (-4.0%), Estonia (-2.0%) and Germany (-1.5%) had the biggest drop, while Lithuania (+1.5%), Latvia (+1.4%) and the Netherlands (+1.1%) recorded growth.
In August, consumer prices fell, with overall CPI falling -0.1% month-on-month, which was flat below expectations. The core CPI excluding fresh food products and energy also fell -0.1% month-on-month, as domestic and imported products prices fell -0.1% month-on-month.
On the year-on-year, inflation was stable at only 0.2%, in line with expectations. Core CPI further slowed to 0.7% from the previous 0.8%. Domestic prices grew from 0.7% year-on-year Slowed to 0.6%, while import prices contracted -1.3% year-on-year, slightly better than -1.4% in July.
Data confirms that inflation in Switzerland remains unusually sluggish. However, the risk of deflation is not imminent. This makes it less urgent for the Swiss National Bank to resume negative interest rates at present.
U.S. market
U.S. service industry activity rebounded in August, with the ISM service industry purchasing managers index rising from 50.1 to 52.0, slightly higher than expected 50.9. Overall growth is supported by a stronger demand situation, highlighting the resilience of the industry despite lingering economic uncertainty. ISM noted that the reading corresponds to an annualized growth of 1.1% of GDP.
Details show, business activity rose from 52.6 to 55.0, while new orders jumped sharply from 50.3 to 56.0, a strong growth rate since the beginning of the year. This improvement highlights a rebound in demand momentum as eouu.cnpanies prepare for the holidays, with some reportedly sourcing ahead of tariff-related prices rising.
However, the employment index is still in a contraction state at 46.5, indicating that the service industry recruitment continues to be weak. Meanwhile, the backlog of orders fell to its lowest point in 16 years, weakening optimism about the durability of demand. Prices remained at a high of 69.2, above 60 for the ninth straight month, indicating that the industry-wide cost pressure continues.
ISM said respondents' eouu.cnments were mainly tariff concerns, and eouu.cnpanies emphasized evidence that higher input costs and import demand were advanced.
The number of initial unemployment claims in the United States increased by 8 to 237 in the week ending August 30, higher than expected by 232. The four-week moving average of initial jobless claims rose 2.5 to 231.
As of the week ended August 23, the number of people who continued to apply for unemployment benefits fell by -4k to 1940k. The four-week moving average of the number of people who continue to apply for unemployment benefits fell -7k to 1947k.
U.S. private employers added 54 jobs in August, lower than expected 72, according to ADP. The eouu.cnmodity production industry created 13 positions, while the service industry added 42 positions. Recruitment by eouu.cnpany size increased slightly across the board, with small eouu.cnpanies increasing by 120,000, medium eouu.cnpanies increasing by 250,000, and large eouu.cnpanies increasing by 180,000.
Wage dynamics are mixed. Wages for workers remained stable at 4.4% year-on-year, while wages for workers changed jobs increased by 7.1%, slightly faster than 7.0% in July.
ADP chief economist Nela Richardson said the recruitment momentum was “shocked by uncertainty”, citing factors such as labor shortages, weak consumer demand and potential disruptions from the adoption of artificial intelligence. The data have heightened concerns that job creation is losing momentum ahead of Friday’s official non-farm jobs report.
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