General Market Analysis 30/07/2024

Quiet Markets Ahead of Data Surge – Dow Off 0.1%

As expected, most global markets experienced a relatively calm trading day yesterday as traders looked ahead to a busy financial event schedule later in the week. The major US indices closed close to flat, with the Dow losing 0.12%, while the S&P and Nasdaq added just 0.08% and 0.07%, respectively. US Treasury yields edged lower in anticipation that the Federal Reserve will signal a rate cut in September later this week. The 2-year yield closed marginally lower at 3.38%, and the 10-year yield dropped 3.3 basis points to 4.167%. Oil saw one of the larger moves, falling as hopes increased for a ceasefire in the Middle East. Brent was down 1.7% to $79.78, and WTI lost 1.8%, dropping to $75.81. Gold also pulled back from resistance levels, losing 0.3% to trade at $2,378 by the New York close.

US Jobs Data in Focus This Week

In a packed event schedule this week, investors will closely monitor the US jobs market, with four separate updates culminating in the key non-farm payroll data on Friday. The Federal Reserve has made it clear that a declining jobs environment is part of the inflation equation, and another round of weaker data would further solidify the anticipated rate cut for September. The updates begin tonight with the JOLTS Job Openings data, with market expectations set at 8.02 million jobs. A lower print here would set the ball rolling; however, if we see stronger numbers and a tighter job market, sharp market corrections could occur over the next few days. The ADP non-farm employment report, Employment Cost Index, and weekly unemployment claims numbers are also due out this week and will all impact the market ahead of Friday’s key updates.

Event Calendar Picks Up for Traders Today

The macroeconomic event calendar starts to pick up today, and investors are expecting market volatility to follow. There is little in the way of tier-1 data scheduled for release in the Asian time zone, but activity should increase once Europe opens with key local inflation numbers due out. The key German CPI data set is due, with individual German states set to release their numbers throughout the morning. Spanish Flash CPI numbers are also set to hit the market early in the day. The New York session sees the first of many tier-1 data releases in the US this week, with the CB Consumer Confidence data and the JOLTS Job Openings numbers. Traders will look for weakening data to confirm a dovish outlook from the Federal Reserve later in the week.

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