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On May 8th, interest rate strategist Ira Jersey commented that the stronger-than-expected non-farm payroll data highlights that the US is far from a recession. Its difficult to see the Federal Reserve choosing to cut interest rates under these circumstances. Given that the interest rate market has largely ruled out a rate cut, we believe that US Treasury yields will not fluctuate significantly.Fed mouthpiece Nick Timiraos: The average number of jobs hired in the U.S. over the past six months has climbed to 55,000, the highest level since May 2025.On May 8th, US employers added jobs for the second consecutive month in April, marking the first time in nearly a year that jobs had increased for two consecutive months, while the unemployment rate remained stable. Data from the US Bureau of Labor Statistics showed that non-farm payrolls increased by 115,000 in April, exceeding market expectations and following a significant increase in March. The unemployment rate remained unchanged at 4.3% in April. Following the data release, US stock index futures maintained their upward trend, Treasury yields continued to decline, and the dollar weakened. The report indicates that the US labor market is gradually stabilizing after near-zero growth last year. Although business demand for labor remains weak, layoffs remain low, and tax cuts are supporting consumer spending and business investment. This data gives Federal Reserve policymakers more room to keep interest rates unchanged for the foreseeable future, as they focus on the new inflationary risks posed by the Iran war. Federal Reserve Chairman Powell stated last week that the job market has shown "increasing signs of stabilization." A key question going forward is whether the Iran war will begin to drag down hiring. Job growth was primarily driven by healthcare, transportation and warehousing, and retail trade. Manufacturing employment declined slightly.Nasdaq 100 futures rose 1% in pre-market trading, while S&P 500 futures rose 0.61%.International oil prices continued their decline, with WTI crude oil falling more than 3% and Brent crude oil falling nearly 3% intraday. A chart provides a quick overview of the pre-market conversion prices of domestic and international crude oil.

Gold Price Prediction: The XAU/USD pair will fall below $1870 as yields rise ahead of Fed Chair Powell's speech

Alina Haynes

Jan 10, 2023 14:55

截屏2023-01-09 下午5.31.06_1024x576.png

 

In the Tokyo session, the gold price (XAU/USD) has fallen below the immediate resistance of $1,870.00. The precious metal has broken through the consolidation formed in the band of $1,870.00-1,881.50 as demand for US government bonds deteriorates ahead of the speech by Federal Reserve (Fed) chairman Jerome Powell on Tuesday.

 

The 10-year US Treasury yields have risen beyond 3.54 percent, dampening risk appetite. Meanwhile, S&P500 futures have become volatile following a sell-off late in Monday's session, signaling caution in establishing positions in risky assets. The US Dollar Index (DXY) is anticipated to attempt a break above the immediate resistance of 103.00 into the auction area.

 

Investors anticipate Fed Powell's speech for fresh cues, as it will provide a head start for the entirety of CY2023. Despite a sharp reduction in December wage inflation, some Fed policymakers continue to endorse a terminal rate prediction of 5.00-5.25%.

 

Mary Daly, president of the San Francisco Fed Bank, argued that interest rates between 5% and 5.25 percent are fair. Also, the president of the Atlanta Federal Reserve bank, Raphael Bostic, anticipates an interest rate peak in the range of 5% to 5.25 percent and the continuation of higher interest rates through CY2023.

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