Friday, May 3, 2013

Liquid Markets : Crude Oil Declines If US Jobs Data Disappoints




Gold prices are likely to rise on Dollar weakness while crude oil falls amid global growth fears if April’s US jobs data falls short of economists’ expectations.

All eyes are on the US Employment reportinto the end of the trading week. Expectations call for the economy to add 140,000 jobs in April, marking an improvement from the paltry 88,000 increase recorded in March. A relatively supportive outcome is likely to mollify “spring swoon” fears and boost risk appetite, cycle-sensitive crude oil and copper prices higher. In the FX space, the US Dollar is likely to find support as traders play up the Fed’s readiness to adjust the size of monthly asset purchases downward in line with improving economic developments, creating de-facto downward pressure on gold and silver amid ebbing anti-fiat demand.
The possibility of a disappointment seems significant however. April’s economic activity surveys have proven uniformly weak, warning that the worrying signs that began to emerge in March were more than just a temporary blip on the radar. If a soft print does materialize, it would appear just as knee-jerk optimism following yesterday’s ECB rate cut begins to give way to a realization that the move was largely cosmetic. Indeed, moving the benchmark cost of borrowing to 0.5 percent seems hardly supportive for the real economy considering the market overnight rate has averaged around 0.1 percent for nearly a year.


Taken together with soft Chinese PMIs released over recent days, this may make for another big-splash outbreak of risk aversion. Needless to say, this bodes ill for the sentiment-sensitive asset space, sending crude oil and copper lower along with stocks and higher-yielding currencies. Gold and silver may find support however as the possibility of an expanded Fed QE effort enters the conversation, drivinggreenback dilution fears and boostingthe appeal of alternative stores of value.




Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities. Flag Counter Visit Us www.deryworldscorp.web.id Visit Us www.deryworldscorp.asia

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