Market today cheered a better risk environment induced by the reports that the US and China reached a consensus on the trade text and renewed Brexit optimism, although they remained slightly unnerved heading into the crucial US payrolls release due later today.
GBP/USD caught a fresh bid wave and regained the 1.31 handle following the reports that the European Council President Tusk is proposing to offer a 12-month Brexit extension to the UK while fears of a Hard Brexit recede as the UK political parties strive for concerted efforts on May’s deal. USD/JPY pair reached fresh 3-week tops at 111.80 amid firmer Treasury yields and positive US equity futures but the bulls take a breather, in response to the flat action seen around the US dollar. EUR/USD stuck to the recovery gains near 1.1230 region, as markets await the German industrial figures for fresh stimulus.
The European docket remains light, with the only German industrial production release that dropped in at 06:00 GMT among other few minority reports later on.
The main event risk this Friday is the US non-farm payrolls data due at 12:30 GMT, with 180k job additions expected in the US economy for the month of March. The data is likely to have a strong bearing on the Fed’s rate hike outlook in the coming months.
Oil s trading near $62.00 during early European open on Friday. The energy benchmark seems less responsive to positive signals concerning the trade deal between the US and China off-late. Investors are likely on a waiting mode ahead of the US March month employment details after the same disappointed markets during its earlier release. Weighing on prices are concerns that an economic slowdown could dent fuel consumption.
Gold prices initially hit four-week lows on Thursday after better-than-expected weekly U.S. jobless claims data led to fewer bids for the safe haven. But it recovered all of that later amid speculation that the United States and China were close to a trade deal that could end the tariffs war of the past year. The yellow metal however reversed its gain today, ahead of the crucial NFP Report. The outcome of the US non-farm payroll could be a possible trigger for gold to set the direction of the next move.