General Daily Market Recap – September 5, 2024

Global assets were all over the place again on Thursday as individual catalysts pushed them.

In the US, mixed labor market updates led to a choppy trading environment and ultimately weakness for the US dollar.

How did your favorite assets trade yesterday? We have the tips!

Titles:

• Average cash earnings in Japan fell from 4.5% to 3.9% y/y against the forecast of 3.6%; Real wages rose for the second straight month, up 0.4%.
• In a speech, RBA Governor Bullock thinks it’s “premature to think about rate cuts,” adding that the Council does not expect to be “in a position to cut short-term rates.“
• Switzerland unemployment rate settled at 2.5%, as expected in August
• factory orders from Germany slowed from an upwardly revised 4.6% y/y in June to 2.9% y/y in July
• S&P Global UK Construction PMI fell from 55.3 to 53.6 (54.6 expected) in August; “Staffing levels were broadly flat”, “Headcount stagnated”
• Retail sales in the euro area rose 0.1% m/m in July as expected, June’s decline was revised lower from -0.3% to -0.4%
• Challenger, Gray and Christmas: Hiring at US companies hit the highest August total since 2009, while year-to-date hiring fell to a new record low
• US ADP Non-Farm Labor Change for August: 99K (144K expected, 111K previously); July additions revised below from 122K
• U.S. unemployed initial applicants fell from 232K to 227K (estimated 231K) in the week ending August 31
• US Non-Farm Productivity revised higher from 2.3% q/q to 2.5% q/q (2.4% est.) in Q2 2024; Unit labor costs fell from 0.9% q/q to 0.4% q/q (0.8% expected)
• Final S&P Global US services PMI for August: 55.7 (55.0 expected, 55.2 previously); “Sales price inflation falls to seven-month low;” “Employment falls for first time in three months”
• PMI ISM Services pick for August: 51.5 (51.3 expected, 51.4 previously); The employment index fell from 51.1 to 50.2; The price index rose from 57.0 to 57.3
• Reuters cited three sources who confirmed this OPEC+ agreed to delay planned increases in oil production for October and November
• EIA Crude Oil Inventory reflected a draw of 6.9 million barrels in the week ended Aug. 30, more than the 0.6 million draw expected and down 0.8 million from the previous week

Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, US 10 Year Yield, Bitcoin Overlay Chart by TradingView

Major assets danced to their own tunes again on Thursday, with traders reacting to specific reports and remaining cautious ahead of key US jobs data.

Asian markets followed US trends, dragging down Bitcoin, oil and stocks, while bonds and gold held steady. Europe added some volatility with mixed economic data.

Volatility was more chaotic during the US session, when mixed updates on the US labor market encouraged a choppy trading environment. U.S. 10-year yields hit new lows since 2024 as bond traders moved from pricing in disinflation to flight to safety, while gold revisited all-time highs near $2,525.

US stock indexes ended the day mixed with the S&P 500 and Dow closing lower, while the Nasdaq capped the day in the green. Bitcoin retested its weekly lows below $56,000, while WTI crude, pushed by OPEC and EIA updates, closed below $69.50.

Currency Market Behavior: US Dollar vs. Majors:

USD chart overlay against major currencies by TradingView

The US dollar fell again as traders digested mixed signals from the labor market, while others awaited Friday’s big NFP report.

The day got off to a mixed start for the greenback, with USD/JPY, AUD/USD and NZD/USD spilling on rising Japanese real wages and dovish comments from Bank of Australia (RBA) Governor Bullock.

The dollar had a bigger impact in European trade as caution rose ahead of US data. With weak ADP numbers and big layoffs, the dollar edged lower, even as jobless claims and services PMIs provided some relief.

The greenback posted another wave of declines near the end of the European session, possibly as traders took profits or stayed on the sidelines for Friday’s top-line updates.

Future potential catalysts for the economic calendar:

• German Industrial Production at 6:00 GMT
• Germany’s trade balance at 6:00 GMT
• UK Halifax House Price Index at 6:00 GMT
• French Industrial Production at 6:45 GMT
• France’s trade balance at 6:45 GMT
• SECO consumer climate in Switzerland at 7:00 GMT
• Italian retail sales at 8:00 GMT
• Eurozone revised GDP at 9:00 GMT
• The latest quarterly employment change in the euro area at 9:00 GMT
• US NFP reports at 12:30 pm GMT
• Canadian labor market figures at 12:30 GMT
• Canada IVEY PMI at 2:00 pm GMT

Traders are in for a BUSY NFP day! Germany could start the party with an output update, followed by final eurozone GDP and employment figures.

In the U.S., traders will be closely watching August labor market numbers for clues on how aggressive the Fed might be when it cuts interest rates later this month.

Canada may also cause increased volatility for CAD pairs with the release of the economy’s labor market data and the IVEY PMI report.

Good luck and good trading on the last trading day of the first week of September!

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