50bps rate cut bets jump after weaker JOLTs data
Bets of a deeper 50bps rate cut by the Fed later this month have increased after yesterday’s job openings number came in below expectations, while the previous month’s number was revised lower as well. Today, we have the jobless claims and ADP nonfarm employment numbers, while tomorrow is the key unemployment and nonfarm payrolls data, which markets are expecting to show a further slowdown in the labor market, which would put pressure on the Fed. Hopes of a larger Fed rate cut have seen risk sentiment improve and the Dollar retreat. The DXY index is lower at 101.34, with the Euro sitting at 1.1080, the Pound at 1.3150, and the Yen at 143.47. EM currencies all gained with the Rand pulling back from around the R18.00 mark to close 0.6% stronger at R17.85. We expect the local currency to consolidate further within the recent R17.70/R18.00 range ahead of tomorrow’s payroll numbers.
Metal prices trading unchanged but oil remains under pressure
Gold is holding steady at just below the $2,500 level while Platinum, Palladium, and the major base metals are unchanged this morning. Brent crude has edged up a touch this morning after closing at a multi-month low of $72.70 yesterday. News that OPEC+ could delay its planned output hikes is providing some support but further downside risks remain.
