Ahead of the NFP report, stocks remained mixed
05/07/2019

Ahead of the Non-Farm Payroll (NFP) report to be released this Friday, Asian stocks were mixed during morning trades.

At 02:03 GMT, while the Hong Kong’s Hang Seng Index rose by 0.3%, the Shenzhen Component and China’s Shanghai Composite both dropped by 0.1%.

Meanwhile, Japan’s Nikkei 225 saw no changes whereas South Korea’s Samsung Electronics Co Ltd (KS:005930) lost by more than 1% after the company hinted that profit might have dropped by 56% compared to the same period last year.

Australia’s ASX 200 was up by 0.4% this morning.

As the market was closed yesterday in the US, traders are now waiting for the U.S. non-farm payrolls report that is due later in the day.

A weaker-than-expected figure could raise expectations that the U.S. Federal Reserve would cut interest rates again at its upcoming meeting.

Ahead of the payroll data, gold remains constant

On Friday in Asia, during the early morning trades, gold prices remained relatively flat. However, it is on track towards a seventh straight week of gains.

At 04:09 GMT, Gold futures for August delivery were unchanged at $1,420.90 per troy ounce.

Due to the negative correlation between the US Dollar and Gold, traders are waiting for the Bureau of Labor Statistics to release the U.S. non-farm payroll report due later in the day.

Analysts are expecting the figures to be around 160,000 new job employment in June compared with the figures in May, 75,000.

Henceforth, if the data is above expectation, then it will raise the value of the US Dollar. Nevertheless, if the figure is weaker than expected, this will make the dollar fall and probably push the US Federal Reserve to cut interest rates.

Early during the week, the U.S. President Donald Trump nominated two candidates to take over Jerome Powell at the Federal Reserve. That news made gold prices go up.

Moreover, the nomination of Christine Lagarde as the new President of the European Central Bank (ECB) has also boosted the price of gold.

Bitcoin starts falling again

Following latest reports that the U.S. House of Representatives Committee on Financial Services has officially requested Facebook (NASDAQ: FB) to stop developing its cryptocurrency, Libra, Bitcoin started to fall in Asian market on Friday.

According to the official letter sent on Tuesday to all the stakeholders of Libra, the committee believes that the project could create a new global financial system that may rival the US monetary policy and the dollar.

As a result, this raises doubts in regards to privacy, national security, trading and monetary policy for investors, consumers and the global economy.

Hence, at 03:39 GMT, Bitcoin prices dropped by 6.3% to $11,160.8 just like Ethereum and XRP fell by 3.8% and 4.4% respectively.

Litecoin also slipped by 0.1% to $119.596.

Financial Events to watch for today

  • 12:30 GMT – Nonfarm Payrolls (Jun) [USA]
  • 12:30 GMT – Unemployment Rate (Jun) [USA]
  • 12:30 GMT – Employment Change (Jun) [CA]