General Market Analysis – 07/02/25

US Markets Mixed Ahead of Non-Farms – Nasdaq Up 0.5%

US stock indices experienced a mixed day in choppy trading yesterday, as investors continued to digest earnings updates and looked ahead to today’s key employment figures. The Dow closed down 0.28%, while the S&P and Nasdaq finished the day in positive territory, closing up 0.36% and 0.51%, respectively.

US Treasury yields regained some of their recent losses, with the 2-year yield adding 2.7 basis points to rise to 4.214%, while the benchmark 10-year yield gained 1.8 basis points, reaching 4.436%. The dollar also strengthened, with major currencies retreating into recent ranges, as the DXY edged up 0.1% to 107.69.

Oil prices declined once again after former President Trump reiterated his intention to increase US production, with Brent falling 0.51% to $74.23 and WTI down 0.72% to $70.52 per barrel. Gold pulled back from recent record highs but remains elevated, closing 0.41% lower on the day at $2,855.07.

Non-Farms in Focus for FX Traders Today

Traders are preparing for a classic Non-Farm Payrolls (NFP) day, with the primary market focus shifting to the employment report shortly after the New York open. While geopolitical developments have dominated market flows this week, today’s US jobs data is expected to be the key driver of sentiment, providing insight into the Federal Reserve’s next move on interest rates.

The dollar has faced significant pressure this week as concerns over tariffs receded. However, strong jobs data could dampen expectations of Fed rate cuts, potentially pushing the dollar higher. Last month’s robust 256k NFP print surprised the market, and a similar result today could have an even greater impact. The consensus forecast anticipates a 169k print, but any figure exceeding 200k could trigger a sharp dollar rally, reversing recent losses.

Calm Markets Ahead of the Non-Farm Storm

Today’s market focus is firmly on US employment data, with trading expected to remain subdued in the early sessions before volatility picks up after the New York open. Market activity was relatively muted in the final session yesterday, particularly compared to the turbulence seen earlier in the week, setting the stage for a quiet Asian session with rangebound conditions.

There are no significant economic releases in the European session, meaning traders will be looking ahead to the key US data. Expectations are for the headline NFP to show an increase of 169k jobs last month, with the unemployment rate remaining steady at 4.1% and average hourly earnings rising by 0.3% month-on-month. Any significant deviation from these expectations is likely to trigger sharp market movements.

Canadian employment data will also be released alongside the US report, but aside from its impact on CAD traders, it is expected to be largely overshadowed as the market remains focused on the US jobs figures.

The post General Market Analysis – 07/02/25 first appeared on IC Markets | Official Blog.