Oil falls to its lowest since February. NFP Today – Daily Market Brief, August 5, 2022

WTI Crude oil lost an additional $2.12 on Thursday, falling to $88.54 per barrel, the lowest since February 2. It is only up $10 so far this year compared to the $78 opening price. The oil market has softened significantly since the announcement of the minor OPEC+ output hike of 100k bpd on Wednesday. With supply seemingly stuck near current levels due to lack of capacity, the focus is on weakened demand.

Technically, the multiple bottoms that have been broken since February indicate a bearish trend. Only a close back over $95 in WTI crude would negate the new medium term bearish bias.

Key Factors for Today

– Most Asian Pacific stock trades were higher, but gains were limited.
– European equities futures point to a higher open.
– DXY is stronger but still below 106, and EUR/USD stopped close to resistance at 1.0250.
– RBA lowers economic growth projections and dramatically raises inflation expectations.

Coming Up

– German Industrial Output
– US & Canadian Labour Market Reports
– Earnings from Allianz, Deutsche Post, LSE & WPP

What does Wallstreet expect for the NFP and US Unemployment numbers?

The July jobs report is Friday at 8:30 am ET. The market arguably wants hiring to cool down so the Fed can pause rate hikes, ie ‘bad news is good news’. A watchful eye will be kept on wage figures. In July, the US economy is predicted to add 250k nonfarm payrolls amid tight labour market conditions. As we noted a month ago, the slowdown in the Establishment survey is already evident in the Household Survey, where there has been no job gain since March. Unemployment should remain at 3.6%. Average hourly earnings could grow 0.3% from June and 4.9% from a year ago, down from 5.1% in May.

RBA forecasts inflation to be high through 2023

In its August monetary policy statement, the RBA board said it expects to normalize policy, but not on a predetermined path. The RBA downgraded economic growth and raised inflation estimates. The board said rate hikes are important to achieve a more sustainable demand-supply balance and concluded by saying global risks are tilted to the downside due to synchronized policy tightening.

Yesterday’s US market ended with mixed results for the stock market

The day’s trading for the main US stock indices ended with mixed results. The Dow decreased little. The S&P was essentially unchanged. Additionally, the NASDAQ index was slightly up and increased for the second day in a row.  Dow industrial average decreased by 0.26 per cent, to close at 32727.20, the S&P index decreased by 0.08 per cent, to close at 4152.01 NASDAQ index increased by 0.41 per cent, to close at 127 to 0.59. Russell 2000 dropped by 0.13%, to 1906.45.

The fifth paediatric monkeypox case in the US announced by California

Since the first two paediatric cases were reported in the nation in July, a fifth child is assumed to have monkeypox in the US. Four days after Indiana health officials verified that two children there also tested positive for monkeypox, California health officials on Tuesday reported the most recent suspected paediatric monkeypox case in a child from Long Beach. The evolution of monkeypox from an endemic illness that primarily affects Africa and is carried by animals to the present vector of the 2022 outbreak is still a mystery to experts and health officials.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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