Cautious ahead of jobs report

It would appear investors are taking a cautious stance ahead of tomorrow’s jobs report, a little spooked by Powell’s comments in Congress and fearful of being caught on the wrong side of another hot jobs report.

That’s clearly the danger at this point, that we get another hot report that confirms January was no blip and instead indicative of a labour market that not only isn’t cooling but perhaps getting hotter. The trend pre-January across many indicators pointed to a cooling in the economy and that was expected to catch up to the jobs market eventually but a variety of data points at the start of the year threw that narrative into doubt.

I expect the February data and that of the months that follow will see the pre-January trend continue, even accelerate given the additional tightening that will have worked its way through to the economy since. But following Powell’s comments, we may need to see clear evidence of that on Friday or further cracks could appear in equity markets.

We’re already seeing a move back to 50 basis point hikes being priced in, with that now seen as more likely than 25 in two weeks. Powell’s comments obviously fuelled that although I still believed he chose his words very carefully to ensure it’s an option that’s taken seriously rather than the base case. The data over the next couple of weeks could potentially cement it.

Steady after Powell hit

Oil prices are treading water today, continuing to stabilize after Tuesday’s plunge on the back of Jerome Powell’s comments. There remain two dominant forces in the markets and recent activity has been evidence of that.

Anything that threatens the US economic outlook is a big downside risk while stronger numbers from China are providing the bullish case. But with neither certain, we may continue to see very choppy but ultimately range-bound trade. Tomorrow’s jobs report will be the next test of that. ​

Holding ahead of jobs data

Gold once again ran into support around $1,800-$1,810 this week but that may only prove temporary if we get another hot jobs report tomorrow. It may well be that the proximity to the report is what’s saved it for now, with technical support kicking in. Suddenly two levels are really standing out, the support mentioned above and $1,860, a move above which would represent the break of a double bottom neckline and potentially indicate that a strong recovery, at least, is on the cards.

A major test

The crypto headlines have not been helpful this past week and have come at a time when broader market sentiment is crumbling, resulting in bitcoin breaking back below $22,000 and looking likely to go further. Previous lows around $21,500 now offer the next test of support, a break of which could be a massive blow after such an encouraging start to the year.

For a look at all of today’s economic events, check out our economic calendar:

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam