05/09/2025 - 07:01 UTCThe USDX was up 0.14% on Thursday and is holding ground near 98.15 in Friday's Asian session. The dollar is gaining traction as traders await fresh labor market data that could shape the interest rate outlook. Recent softer data, including a higher-than-expected number of new jobless claims and a disappointing ADP employment report, has bolstered expectations for a September rate cut. The CME FedWatch tool now shows a near 100% chance of a 25-basis-point cut. However, some Fed officials continue to emphasize the need to balance inflation and job market risks. Attention is now on Friday's highly-anticipated Nonfarm Payrolls report, which could provide crucial clues for the Fed's policy decision. The US economy is forecast to see 75,000 jobs added in August, while the Unemployment Rate is projected to edge up to 4.3% during the same period.
On the commodities front, WTI crude oil was down 0.75% on Thursday, extending a 2.75% drop from Wednesday, as traders continued to assess the likelihood of an output hike by OPEC+. Gold halted its multi-day positive streak, retreating 0.25% after reaching all-time highs on Wednesday. The rally in silver prices also took a breather after recently rising to its highest level since the summer of 2011.
Most Asian markets saw mixed movements on Friday as investors awaited key US data. The region took positive cues from Wall Street, where optimism over lower interest rates saw the S&P 500 close at a record high on Thursday. Chinese markets steadied after being battered by profit-taking throughout the week. As of 05:06 AM GMT, the China SSE was down -0.34%, while the China SZSE gained 1.98% and the Hong Kong 50 rose 0.82%. Investors are now looking to a host of economic readings due next week for more cues on the Chinese economy. In Japan, the Japan 225 shed -0.37% and the Japan 100 lost -0.24% as of 05:06 AM GMT. The sentiment towards Japanese stocks had been buoyed earlier in the week by the new US-Japan trade deal, which will lower tariffs on Japan's key automobile sector.
President Donald Trump stated on Thursday that his administration would soon impose tariffs on semiconductor imports from companies that do not shift production to the United States. Following the announcement, both Apple and TSMC stocks saw gains, with the market interpreting the move as a positive for the two technology giants due to their existing US investment plans. Apple’s stock rose 0.56% higher after the President singled out its CEO, Tim Cook, as being "in pretty good shape" regarding the new tariff policy. This comes as the iPhone maker recently committed to increasing its total domestic investment in the US to $600 billion over the next four years. Meanwhile, Taiwanese chip giant TSMC, which has already announced plans for chip manufacturing in the United States, saw its stock move 0.86% higher. The new policy appears to favor companies that have already demonstrated a commitment to building a domestic presence.
In other news, shares of Salesforce fell 4.85% after the company's quarterly results disappointed investors and it issued a third-quarter revenue forecast below Wall Street estimates. This fueled concerns that its push to monetize AI platforms may be falling behind. The company's stock decline was limited somewhat by its announcement of a $20 billion increase to its share buyback program. Meanwhile, Texas Instruments also fell 4.33% as its CFO cited the impact of US tariffs as a concern for cooling demand.
Crypto prices declined on Thursday as caution over upcoming US interest rate decisions and labor data kept traders wary of speculative assets. Bitcoin, the largest crypto by market cap, was down 0.91%, while Ethereum, the second largest, fell 3.47%.
The US Securities and Exchange Commission (SEC) released its rulemaking agenda for crypto oversight, signaling potential sweeping changes to regulations. The SEC outlined plans to propose new rules for the offer and sale of digital assets, including possible exemptions and safe harbors. This comes as markets are increasingly convinced that the Federal Reserve will cut interest rates this month, though Friday's nonfarm payrolls data could test that notion.
The EUR/USD pair slipped on Thursday pressured by disappointing Eurozone retail sales and renewed dollar strength.
U.S. labor indicators painted a weaker picture of the job market. August Challenger job cuts rose to nearly 86,000, while ADP employment data missed expectations with only a 54,000 increase versus forecasts of 65,000. Weekly initial jobless claims also climbed to 237,000, surpassing estimates of 230,000.
Adding to the pressure, the July trade deficit widened sharply to $78.3 billion—the highest in four months—while ISM Services PMI improved to 52, signaling resilience in business activity despite lingering tariff-driven price pressures.
Markets are now pricing in a near-certainty 97% of a 25-basis-point rate cut by the Federal Reserve at its September meeting. Fed Chair Jerome Powell’s recent comments in Jackson Hole, where he signaled flexibility on rates, reinforced expectations of policy easing.
On the European side, retail sales contracted more than expected in July, falling -0.5% month-over-month and slowing to 2.2% annual growth, down from 3.5%. The weak print, combined with slowing inflation, suggests subdued consumer momentum.
Nonetheless, European Central Bank policymaker Isabel Schnabel struck a hawkish tone, stressing that rates should remain steady as the eurozone economy shows resilience. Markets currently assign a 91% probability that the ECB will hold rates unchanged, with only a slim chance of a 25-basis-point cut this year.
Gold prices eased on Thursday, pulling back from record highs as traders booked profits ahead of Friday’s closely watched U.S. nonfarm payrolls report.
This comes a day after spot prices surged to an all-time high fueled by weaker U.S. job openings data that reinforced expectations for Federal Reserve rate cuts and boosted safe-haven demand.
Fresh data showed initial jobless claims in the U.S. rose more than anticipated last week, underscoring labor market softening. Investors are now awaiting Friday’s payrolls report, which could shape expectations for Fed policy in the coming months.
Fed officials this week reiterated concerns about labor market weakness, signaling that policy easing remains likely. Futures markets currently reflect a 97% probability of a 25-basis-point cut at the September meeting, according to CME’s FedWatch tool.
Gold, a non-yielding asset, tends to outperform in low-rate environments and periods of uncertainty. Adding to uncertainty, U.S. President Donald Trump escalated his clash with the central bank by attempting to remove Fed Governor Lisa Cook, triggering a legal dispute that raised fresh doubts over institutional stability.
Oil prices fell about on Thursday, hitting a two-week low after U.S. government data showed an unexpected build in crude inventories and as markets braced for a potential OPEC+ output increase at this weekend’s meeting.
The U.S. Energy Information Administration (EIA) reported a 2.4-million-barrel rise in crude stockpiles for the week ending August 29, well above analysts’ expectations for a 2.0-million-barrel draw. The increase also exceeded the 0.6-million-barrel build reported a day earlier by the American Petroleum Institute (API).
Attention now turns to OPEC+ policy. Eight members of the producer alliance, including Russia, are weighing further production hikes for October according to sources.
OPEC+ has already committed to lifting supply targets by about 2.2 million barrels per day (bpd) from April through September, along with an additional 300,000 bpd increase allocated to the United Arab Emirates.
Meanwhile, President Donald Trump urged European leaders to halt Russian oil purchases, arguing that revenues continue to support Moscow’s war in Ukraine. Any cut in Russian exports could lift global prices. Russia remains the world’s second-largest producer after the U.S.
The US 500 ended at an all-time closing high on Thursday as softer labor market data failed to alter expectations for a Federal Reserve rate cut, with investors turning their focus to Friday’s closely watched U.S. monthly jobs report.
Amazon.com surged 4.3%, helping lift the consumer discretionary sector by more than 2%. Chipmaker Broadcom added 1.2% before reporting quarterly results and extended gains in after-hours trading after forecasting fourth-quarter revenue above Wall Street expectations.
Shares in Salesforce fell more than 4% on Thursday after the enterprise software company reported quarterly results that missed investor expectations and issued a weaker-than-expected revenue forecast for the third quarter. The update raised concerns that Salesforce’s efforts to monetize its artificial intelligence agent platforms may be lagging.
Tech firms, particularly cloud-based businesses, are under pressure to demonstrate returns on massive AI investments. Salesforce has positioned its agentic AI services as a key future growth driver but has yet to show meaningful payoff. To cushion the blow, the company announced a $20 billion boost to its ongoing share buyback program, which helped limit deeper declines in the stock.
On the economic front, weekly jobless claims came in higher than expected, while private-sector hiring slowed in August, underscoring signs of a cooling labor market. Still, investors expect the Fed to proceed with a quarter-point cut at its September meeting.
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