Mid-Market Update: Markets focused on next month’s NFP, Oil higher on OPEC++ optimism, Gold steadies

This was supposed to be the least important nonfarm payroll release for most traders because job losses were expected to be somewhat limited because the coronavirus impact was supposed to be primarily felt in next month’s report.  US March payrolls collapsed by 701,000, much worse than the estimate for a decline of 100,000 job losses.  The Unemployment surged to 4.4% and wages rose as much of the damage was done to lower paying jobs. 

US stocks and the dollar whipsawed following the worse job decline since 2009, while the Treasuries pretty much ignored the release. 

Wall Street is likely going to start to price in a worse outlook for the labor market and that could translate to unemployment skyrocketing closer towards the 20% level.  US equities are trying to finish the week in the green, but it will be hard for investors to become optimistic about the economy when much of the country still needs to deliver a stronger response to the outbreak. 


Oil keeps on rising on sky high expectations that OPEC and allies will reach a crude production cut agreement next week.  OPEC + will hold a meeting on Monday and their goal is to make this production cut agreement bigger and with more members.  Recently, Russia would be the headache during these meetings, but that won’t be the case this time.  Oil prices have declined too drastically and with storage capacity likely to be reached over the next couple months, the Russians were going to cut anyway.  If you are going to cut, might as well get others on board too. 

OPEC ++ will also try to get Texas on board, and while Texas will obviously be cutting production, they might not be able to put paper to it.  The US can’t join a cartel, so it will be interesting if this becomes a big issue for others looking to join OPEC ++. 

Even if we see OPEC and their allies reach an agreement to cut production by 15 million barrels, WTI crude will have trouble breaking and staying above the $30-barrel level.  The crude demand devastation duration is the great unknown and that should keep a tap on this recent rally. 

Oil prices are off the session highs after Russian press reported the Monday OPEC+ meeting may not happen if sides are not ready.  This is likely posturing by the Russians to see some upfront concessions by the US.  The short-term (leading up to the Monday meeting) outlook is still bullish for oil and any pullback should be limited. 


Gold’s outlook was tarnished this week after it lost some central bank support, but demand is likely to be strong over the coming weeks as refiners urgently talk to their local authorities about restarting production.  Gold prices initially rallied following the worse-than-expected nonfarm payroll report, but that quickly faded. 

Gold volatility will remain high over the coming weeks, and despite this down week, prices should be supported in the long-term as the impact of COVID-19 intensifies across the world.  Fiscal and monetary stimulus will likely need to remain in place a lot longer and that should ultimately be the backbone of gold’s bullish stance. 

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.