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Market Outlook Ahead of NFP
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Asia session

Market outlook ahead of the NFP announcement – the biggest news of the day to come out of the Asian markets is Australia’s RBA Statement on Monetary Policy. However, in the Philippines all eyes are on the unemployment rate ahead of the presidential election next week.

Australia

The Australian dollar has seen a two day rally after the RBA brought a hawkish outlook. But a combination of factors in the US helped the major recover. Price found support at the 38.2% Fibonacci retracement of the recent bull trend, spanning from April 21 up to April 28. That support set in just after the Tokyo open last night at which point USD bulls got back on the bid.

This along with concerns surrounding China’s strict Covid lockdowns has helped strengthen the dollar and break any bullish rally for the Aussie. All eyes will be on today’s RBA Statement on Monetary Policy following it’s decision to increase interest rates for the first time in 11 years by 25 basis points.

Philippines

Next week we see the end of the Presidential election race. Filipino’s are set to go to the polls on May 9th 2022 to decide who should replace the popular Rodrigo Duterte who is considered by many a national hero after he cleaned up the country with his iron fist.

But today all the attention will be on the unemployment rate. In the Philippines Unemployment dropped to 6.4 percent in February 2022 from 8.8 percent in the same month a year earlier, as the economy recovered from the coronavirus disruptions. The number of unemployed was at 3.13 million, down from 4.19 million in February 2021. Meanwhile, the number of employed came in at 45.48 million, up from 43.15 million the year before. Among employed persons, workers in the services sector made up 58.2 percent of the total, followed by those in the agriculture sector (23.9 percent) and industry (17.9 percent). The labor force participation rate edged up to 63.8 percent from 63.5 in February 2021. In January, the jobless rate was also at 6.4 percent.

With a drop to 5.8% in April, the economy seems to be in recovery after the covid pressure faced in the nation and will be a great stepping stone for the next elected president.

United States

As stated earlier the US dollar has recovered this week. With the Fed taking charge of the monetary policy and leading the way ahead of its counterparts is proof that the Fed is getting it right.

Price of gold is one took look at ahead of the NFP release. The NFP report is expected to show the economy adding 391K jobs in April following the 431K expansion the month prior, while the Unemployment Rate is seen narrowing to 3.5% from 3.6% during the same period. The update may do little to derail the recent advance in the price of gold as the Fed acknowledges that “labor supply remains subdued,” but evidence of a tightening labor market may keep Chairman Powell on track to deliver another 50bp rate hike at the next interest rate decision on June 15 as the FOMC steps up its efforts to tame inflation.

Until then, the price of gold may stage a larger recovery as it appears to be reversing course ahead of the 200-Day SMA ($1835), but the precious metal may face headwinds throughout 2022 as the shift in Fed policy is likely to prop up US yields over the coming months.

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