General Market Analysis – 02/05/25

Wall Street Pushes Higher Again – Nasdaq Up 1.5%

US stocks pushed higher again in trading yesterday as both Meta and Microsoft reported strong earnings. The S&P and Dow clocked up their eighth straight day of gains, rising 0.63% and 0.21% respectively, whilst tech stocks helped the Nasdaq finish up 1.52% on the day. The dollar pushed higher again against the majors, with the yen a notable loser, the DXY up 0.59% to 100.20. Treasury yields pushed back from recent lower levels, the 2-year up 9.6 basis points to 3.698% and the 10-year up 5.5 basis points to 4.217%. Oil also gained back some ground on news of more sanctions on Iran from the US, Brent up 1.34% to $61.88 and WTI up 1.77% to $59.21. Gold continued to drop lower, losing 1.44% on the day to close at $3,240.29.

Non-Farm Payrolls to Move Markets Today

US Non-Farm Payroll data is due out today, and investors will be paying even closer attention to the number this month as it comes after weeks of tariff updates, and they are keen to see if the local market is reacting. Market expectation is for the headline number to show an increase of 138k jobs in the last month, with both the Average Hourly Earnings numbers and Unemployment Rate remaining stable at 0.3% m/m and 4.2% respectively. Any significant deviation from any of these key numbers will see a strong market reaction across markets. Wall Street has had a good run recently after being hit earlier in the month, but a significant weakening in the US jobs market could undo all of the recent work, whereas a strong print would indicate a resilient economy and could give the green light for further gains.

US Jobs Numbers in Focus for Markets Today

There is no doubt that the US jobs numbers will be the major focus for investors in today’s trading. However, there are another couple of data events scheduled, as well as the usual trade updates likely to hit the newswires. Asian markets will again be without Chinese liquidity today, but the initial focus will be on Australia, with Retail Sales numbers due out early in the session (exp 0.4% m/m). The London session will once again have a focus on European inflation data, with the EU Flash CPI Estimate (exp 2.1%) and Core CPI Estimate (exp 2.5%) due out before focus moves to the US and the big Non-Farms data. Australian markets will also be aware that Parliamentary Elections take place over the weekend, and any big surprises could lead to some gapping on the Monday open.

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