Octa broker's take on the upcoming NFP report
The report offers critical insights into the health of the U.S. labour market, detailing job creation in the non-agricultural sector, unveiling the latest unemployment figures, and tracking changes in average hourly earnings. This data release has the potential to reshape U.S. interest rate expectations and steer investor sentiment, which is why the report is closely watched by market participants. The report will almost certainly affect the exchange rate of the U.S. dollar (USD) and trigger volatility across various financial instruments, including equity indices and commodities.
Previous report
The previous NFP report (published on 6 June) presented a somewhat mixed picture. While the headline figure, showing the number of jobs created, was above the market consensus, the preceding report was revised downward. At the same time, average hourly earnings grew faster than expected. Overall, the market interpreted the report as bullish for the DXY, which ended the day higher by 0.50%, while XAUUSD and EURUSD were down 1.22% and 0.45%, respectively.
Market Expectations
The NFP release arrives against a backdrop of heightened uncertainty and amplified volatility. Financial markets remain gripped by the persistent geopolitical instability, particularly in the Middle East and Eastern Europe, alongside ongoing trade tensions between the United States and global partners. Indeed, despite the NFP's significance, the ongoing focus on global trade tariffs could partly limit its influence on market movements.
Current market positioning strongly suggests a widespread expectation for a weak report that would ostensibly provide further justification for a Federal Reserve (Fed) interest rate cut later this year. This sentiment is clearly reflected in both consensus surveys and recent price action in the U.S. Dollar Index (DXY). Thus, according to Reuters, analysts expect to see only a modest increase of approximately 110,000 jobs, the lowest projected figure since November 2024. Concurrently, the DXY is hovering near a two-year low, just shy of the 97.00 mark. The primary reason for the greenback's recent weakness has been the prevailing dovish monetary policy expectations. In fact, the latest interest rate swaps market data implies almost a 75% chance of a 25-basis point (bps) rate cut by the Fed in September. Looking further ahead, the market currently prices in around 30% probability of a full percentage point reduction in the Fed's benchmark rate by July of next year.
Potential Outcomes
Kar Yong Ang, a financial market analyst at Octa broker, offers a perceptive outlook: 'Several factors, such as a weak dollar, dovish monetary policy expectations, and a rather pessimistic consensus for tomorrow's labour market report suggest that higher-than-expected NFP figures will likely have a disproportionately stronger impact on gold [XAUUSD] and EURUSD vs lower-than-expected figures. In other words, a bullish NFP report's upward pressure on the U.S. dollar will likely outweigh the bearish impact of a weaker-than-expected release'.
On balance, in case the NFP report reveals stronger-than-expected results—indicating a larger increase in payrolls and/or higher growth in average hourly earnings—the greenback could experience a substantial rebound, leading to sharp downside corrections for XAUUSD and EURUSD. Conversely, should the NFP report come out weaker than expected, gold and the euro may receive only a minor boost.
'I would treat any correction in gold as a buying opportunity', says Kar Yong Ang. 'XAUUSD remains in a structural uptrend due to strong fundamental reasons, so it is recommended to look for buying opportunities. Consider placing pending buy-limit orders on XAUUSD, particularly near the $3,280 level, in the event of a bearish reaction to the U.S. NFP report. Should a bullish reaction unfold, consider placing pending buy-stop orders on XAUUSD, specifically near $3,360'.
___
Disclaimer: This press release does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs. Any actions taken based on this content are at your sole discretion and risk—Octa does not accept any liability for any resulting losses or consequences.
Hashtag: #Octa
The issuer is solely responsible for the content of this announcement.
Octa
Octa is an international CFD broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.
The company is involved in a comprehensive network of charitable and humanitarian initiatives, including improving educational infrastructure and funding short-notice relief projects to support local communities.
In Southeast Asia, Octa received the 'Best Trading Platform Malaysia 2024' and the 'Most Reliable Broker Asia 2023' awards from Brands and Business Magazine and International Global Forex Awards, respectively.
Octa
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
15 hours ago
- The National
Trump to tour Federal Reserve as war on Chair Powell escalates
US President Donald Trump was set to tour the site of the Federal Reserve's headquarters on Thursday, a significant escalation in his relentless pressure campaign on Fed Chair Jerome Powell to cut interest rates. The White House has framed the visit to tour the renovation of two Fed buildings, whose costs have swelled from an initial $1.9 billion to roughly $2.5 billion. Some believe the Trump administration is attacking the renovation costs as a pretext to fire Mr Powell. Presidential visits to the Federal Reserve are rare, with the commander-in-chief generally taking precautions to preserve the central bank's autonomy. The last president to visit the Fed was George W Bush in 2006 when he swore in Ben Bernanke as chair. Other Trump aides are expected to tour the Fed's renovations with him. It was not clear if Mr Trump will meet Mr Powell. 'The Federal Reserve is working with the White House to accommodate their visit,' a Federal Reserve spokesperson told The National. Mr Trump has grown increasingly frustrated with the Fed's extended rate-cut pause. The US central bank has held its interest target rate range steady at 4.25 to 4.50 per cent this year due to uncertainty surrounding tariffs. Recent data have shown that the effects of tariffs are beginning to creep into the US economy. The Labour Department reported last week that inflation had ticked up in June. Underlying data showed that prices in everyday items such as household appliances, toys and apparel are being passed down to consumers. Some economists, however, argue that the Fed should begin cutting rates soon to help protect the labour market. Unlike most central banks, the Fed holds a dual mandate of price stability and full employment. The visit also comes less than a week until the Fed's next meeting, where it is again expected to hold rates steady. But Mr Trump has repeatedly called for the Fed to lower interest rates by as much as 3 percentage points to around 1.25 per cent. He has said doing so could help service the US debt, a concept known as fiscal dominance. Projections released by the Fed in June signalled that the central bank expects to cut rates twice this year, although it is unclear when. Traders currently expect the Fed to resume rate cuts in September, according to CME Group data. Mr Powell has repeatedly said Mr Trump does not have the legal authority to fire him. And such a move would likely lead to a financial crisis as markets would question the independence of future rate moves by the central bank. Mr Powell has also said he will not resign before his term as Fed Chair expires in May 2026. The bond market was mostly subdued ahead of Mr Trump's visit, with the yield on the 10-year Treasury up 1 basis point at 4.398 per cent.
Zawya
17 hours ago
- Zawya
UAE showcases global leadership at UN Sustainable Development Forum, commits to 2026 SDG review
New York, USA: The UAE reiterated its strong commitment to global sustainable development at the United Nations High-Level Political Forum (HLPF) on Sustainable Development 2025 in New York, emphasizing international partnerships and placing human progress at the center of its vision for the 2030 Sustainable Development Goals (SDGs) and beyond. The message capped an active UAE presence at the forum, organized at the UN headquarters by the UN Department of Economic and Social Affairs, and attended by global leaders and organizations. The UAE delegation comprised senior officials from key ministries, national committees, and leading organizations, including the Ministry of Cabinet Affairs, Ministry of Interior, Ministry of Investment, Government Experience Exchange Programme (GEEP), General Secretariat of the National Committee on SDGs, the Environment Agency - Abu Dhabi (EAD), Noor Dubai Foundation, and Dubai Chambers. The UAE's Pioneering Model His Excellency Abdulla Nasser Lootah, Assistant Minister of Cabinet Affairs for Competitiveness and Experience Exchange and Chair of the National Committee on Sustainable Development Goals, highlighted the UAE's innovative and collaborative approach to international development cooperation. He said: 'We presented models and initiatives that showcase pioneering national development initiatives and reflect the importance of strategic partnerships in accelerating SDG achievement. These included the 2045 XDGs Report that envisions development prospects for the next two decades, and GEEP. We held meetings that focused on continually enhancing multilateral collaborative action to support finding innovative solutions to challenges in health, economic growth, the future of work, biodiversity, and international stability.' He confirmed the start of intensive preparations for the 2026 Voluntary National Review (VNR), to monitor and assess progress toward the 2030 SDGs. This reflects the UAE's unwavering commitment to transparency and accountability, comprehensive analysis of challenges and opportunities, and identifying future development priorities with participation from government, private sector, and civil society to ensure effort integration and vision unification, based on the UAE's ambitious vision for building a sustainable and inclusive future based on innovation, sustainability, and human development. HE Lootah noted that preparations are underway for the UAE's 2026 Voluntary National Review, underlining the nation's commitment to transparency, cross-sector collaboration, and a sustainable, inclusive future. The UAE is also preparing to host the UN Water Conference in December 2026, advancing global water sustainability. Strengthening Global Cooperation and Shaping Tomorrow The UAE reaffirmed its commitment to international cooperation and knowledge exchange, spotlighting initiatives that drive climate action, economic growth, and human development. Through high-profile events – including the 'Shaping Tomorrow: UAE Leadership for a Sustainable Future' exhibition – the delegation showcased innovative models and fostered dialogue with global partners. A special session by GEEP expanded the UAE's partnership network to nearly 50 countries and six international organizations, reinforcing its leadership in collaborative action. The launch of the 2045 XDGs Report, which outlines global development priorities beyond 2030 and builds on the momentum of the SDGs to address emerging challenges and opportunities, along with findings from a global survey, further underscored the UAE's active role in shaping sustainable development with forward-looking recommendations for the next two decades. Driving Innovation and Partnerships for Sustainable Progress The UAE delegation, in partnership with the UAE Consulate General in New York, showcased national leadership in advancing the SDGs through innovation and collaboration. The pivotal role of the Global Councils for SDGs – launched at the World Government Summit – was highlighted as a platform uniting leaders from government, international organizations, academia, and the private sector to accelerate progress through shared expertise. Sessions organized by the General Secretariat of the National Committee on SDGs focused on promoting gender balance and child welfare, addressing the digital gender gap, and strengthening women's leadership as essential drivers of sustainable growth beyond 2030. The UAE also hosted a roundtable on reimagining economic growth for people and the planet, and led discussions on economic diplomacy and integrating social and economic objectives for global stability. Additionally, the Ministry of Interior presented successful cross-border environmental initiatives, such as the Green Shield Operation, which aims to protect biodiversity in the Amazon Basin. Throughout the forum, the UAE strengthened international cooperation by holding 48 bilateral meetings and participating in high-impact Science Day activities. The HLPF on Sustainable Development is the UN's leading platform for SDG review and progress.
Zawya
17 hours ago
- Zawya
Trump says he wants Musk and his companies to thrive in US
President Donald Trump said on Thursday he would not destroy Elon Musk's companies by taking away federal subsidies and that he wants the billionaire tech-entrepreneur's businesses to thrive. "Everyone is stating that I will destroy Elon's companies by taking away some, if not all, of the large scale subsidies he receives from the U.S. Government. This is not so!," Trump said in a social media post. "I want Elon, and all businesses within our Country, to THRIVE." Trump's statement follows a public clash with his former close ally on June 5 over his tax bill. Musk warned Tesla investors on Wednesday that U.S. government cuts in support for electric vehicle makers could lead to a "few rough quarters" for the company. A week after the spat in June, Reuters reported the White House had directed the Defense Department and NASA to gather details on billions of dollars in SpaceX contracts to ready possible retaliation against the businessman and his companies. Musk spent more than a quarter of a billion dollars to help Trump win November's presidential election and led the Department of Government Efficiency's chaotic effort to slash the budget and cut the federal workforce. The Tesla CEO left the administration in late May to refocus on his tech empire. Trump and Musk fell out shortly afterward when Musk openly denounced the Republican president's tax-cut and spending bill, leading to threats by Trump to cancel billions of dollars worth of federal government contracts with Musk's companies. Musk's SpaceX had been considered a frontrunner to build out Trump's $175 billion Golden Dome missile defense shield and remains a natural choice for key elements of the project. But sources familiar with the matter told Reuters earlier this week that the administration is expanding its search for partners to build Golden Dome as tensions with Musk threaten SpaceX's dominance in the program. (Reporting by Bhargav Acharya in Toronto; Editing by Doina Chiacu and Philippa Fletcher)
