Global shares rally slows down as investors await US private-sector jobs data; gold tumbles while oil regains strength

Stock Market Traders

Global shares stalled on Wednesday, hovering near record-highs, as caution set in ahead of a key read of US private-sector employment and as a surge in cases of Covid-19 in Asia in particular dented some investor confidence.

US stock futures eased, after the benchmark indices hit all-time highs the previous day. Dow Jones futures declined by 0.28%, S&P 500 futures were down 0.15% and Nasdaq futures dipped 0.4% at 4:24 am E.T..

Economists widely expect the private-sector ADP jobs report to show 600,000 workers were added to payrolls in June, versus May’s 978,000.

US private-sector jobs data is often used as an indication for how weak or strong the broader US non-farms payroll data – due to be released on Friday – will be. Jobs data has been a key measure of economic recovery, and strong readings may entice the Federal Reserve to turn to hawkish policies in place on economic growth stimulating ones.

The yield on the 10 year US Treasury note was largely steady around 1.476%.

Gold fell for a third straight day, losing 1.17% to trade at $1,757.47 per ounce. The prospect of the Fed allowing interest rates to rise, which in turn lifts the appeal of the US dollar, and resurgence of Covid-19 cases globally cause investor jitters, Dhwani Mehta, senior analyst at FXStreet said.

“Despite a slight improvement in the market mood, investors still remain cautious, keeping the dollar’s demand underpinned. Meanwhile, stabilizing US Treasury yields also remain a weight on the gold price,” she said.

In Europe, markets had a muted start to the trading day, as eurozone inflation data was released. While headline inflation declined, goods inflation soared from 0.4% in May to 1.2% in June.

“For now, most of the evidence points to this being largely temporary, but upside risks to the inflation outlook haven’t been this substantial in years and should keep the ECB on the edge of its seat.” ING analysts said.

The Euro Stoxx 50 was last down 1.3%, Frankfurt’s DAX dipped 1.35% and London’s FTSE 100 lost 0.82%.

Oil prices rose. Brent crude was last up 0.23% and trading at $74.45 per barrel, while WTI crude gained 0.51% and was last around $73.35 per barrel. The OPEC+ exporter group meet on Thursday to discuss the outlook for crude output. Analysts do not expect any change in the group’s current supply policy.

Asian markets had a mixed session on Wednesday. The Shanghai Composite rose by 0.5% despite manufacturing and non-manufacturing activity slowing down in June, Hong Kong’s Hang Seng index dropped by 0.37% and Tokyo’s Nikkei 225 fell slightly by 0.07%. Concerns about the spread of the delta Covid-19 variant and its implications for economic recovery continue to put pressure on markets and have led to investor caution.