All Eyes on Non-Farm Payrolls as Market Braces for Key Data

Yesterday, the market saw a continuation of the bearish sentiment across global indices. European, US, and Asian stocks continued their downward trends, adding to the week’s correction. The key event was the release of the ADP Non-Farm Employment Change from the US, which came in lower than expected, falling below 100,000. This added to concerns about the US labor market, following the disappointing JOLTS job openings data from Wednesday.

We also had the ISM Services PMI from the US, which came in at 51.5, aligning with expectations and suggesting steady growth in the services sector. However, the markets remained focused on the weaker labor data, contributing to further stock declines.

On the commodities front, we saw continued pressure. Oil, natural gas, and metals, including palladium and nickel, continued their slide. Gold managed to hold steady, reinforcing its safe-haven status amid market uncertainty.

Today, all eyes are on the non-farm payrolls report from the US, along with average earnings and the unemployment rate. The market is expecting 164,000 new jobs, with the unemployment rate forecasted to drop slightly to 4.2%. This data will be key in shaping the direction of the market, particularly as it relates to interest rate expectations from the Federal Reserve.

Canada will also release its job data today, with the employment change expected at 23,7K and the unemployment rate forecasted to remain stable. These figures, combined with the earlier interest rate cut, will provide further clarity on the state of the Canadian economy.

As for the market sentiment this morning, indices are trying to stabilize after yesterday's declines, but there is still some caution in the air. European futures point to a flat-to-slightly negative start, while in the currency market, the Japanese Yen continues to perform strongly as a safe-haven asset, while commodity-linked currencies like the Australian Dollar and New Zealand Dollar remain under pressure.

Commodities remain subdued, with oil, natural gas, and metals continuing their bearish trends. Gold, however, is maintaining its strength, holding near its long-term highs, supported by risk-off sentiment.

All in all, today’s non-farm payrolls report will be the key event to watch. Depending on the numbers, we could either see a continuation of this week’s correction or some stabilization in the market. Be cautious, protect your trades, and stay ready for volatility!