Market Summary
Oil Rebounds as Hormuz Deal Remains Uncertain: Brent crude rose 1.60% this morning to $83.80 a barrel as hopes for a lasting agreement to reopen the Strait of Hormuz faded. While oil remains around 5% lower for the week following earlier optimism over U.S.-Iran negotiations, renewed uncertainty surrounding the key shipping route has brought geopolitical risk back into focus. Higher energy prices have also revived concerns that inflationary pressures could persist, complicating the outlook for monetary policy.
Treasuries Slip Ahead of US Payrolls Report: U.S. Treasury prices weakened as rising oil prices and resilient labour market data reinforced expectations that the Federal Reserve may need to keep interest rates higher for longer. The benchmark 10-year Treasury yield held at 4.68% after climbing seven basis points during Thursday's session. Initial jobless claims remained below 200,000 for a third consecutive week, highlighting continued strength in the U.S. labour market. Investor attention now turns to today's Non-Farm Payrolls report, with a stronger-than-expected reading likely to support the case for higher-for-longer interest rates.
Equities Pause While Gold Extends Gains: Global equity markets remained subdued after this week's record highs, with South Korea's KOSPI falling 1.00% overnight as caution around technology and AI-related stocks persisted. U.S. futures were little changed, with S&P 500 futures edging 0.07% lower while Nasdaq futures traded modestly higher. Meanwhile, spot gold climbed a further 1.05% this morning to $4,284 an ounce as investors balanced renewed geopolitical uncertainty against expectations for the Federal Reserve's next policy move.
Yen Gives Back Intervention Gains: The Japanese yen remained under pressure, trading around 158.40 against the U.S. dollar after surrendering nearly half of last week's intervention-driven rally. Having strengthened to as high as 155.23 earlier in the week, the currency has weakened as market attention shifted back toward U.S. interest rate expectations and the resilience of the American economy.
Economic Calendar
- U.S. Non-Farm Payrolls
- U.S. Unemployment Rate
- Canada Jobless Rate
- Mexico CPI
- German Industrial Production
Key Market Moves Today
- S&P 500 Futures: -0.07% (7,729.0)
- U.S. 10-Year Treasury Yield: +0.43 bps (4.68%)
- Brent Crude: +1.60% ($83.80)
- Bitcoin: -0.21% ($64,256)
- Spot Gold: +1.05% ($4,284)
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