Global shares trade near record highs ahead of key US jobs data while gold slides against a stronger dollar

Traders and financial professionals work on the floor of the New York Stock Exchange
Traders and financial professionals work on the floor of the New York Stock Exchange Drew Angerer/Getty Images

Global shares traded near record highs as investors awaited the release of US non-farm payroll data later in the week, which is expected to reflect strong growth, but could lead the Federal Reserve to withdraw support for the economy more quickly than many expect.

US futures were muted on Tuesday, with Dow Jones futures last up 0.17%, S&P 500 futures flat and Nasdaq 100 futures dipping 0.19% at 4:00 am E.T. The Nasdaq hit a fresh record high on Monday as tech stocks climbed for the sixth session in a row, which also took the S&P 500 to new highs.

Consensus expectations for the US non-farm payroll reading on Friday are that 690,000 employees will have been added to payrolls in June, compared to 559,000 in May. This would reflect the fastest rate of growth since March.

“A high print should see a tapering reaction in markets. In contrast, another soft print will probably see the transitory inflation, rates low forever, buy-everything gnomes finish the week with the upper hand.” Jeffrey Halley, senior market analyst at OANDA said.

The dollar, which thrives on a more hawkish Fed, will ultimately be supported by the central bank limiting its bond purchases, rose to a one-week high against a basket of major currencies.

Gold fell against the stronger dollar and was last down 0.46%, trading for $1,769.56 per ounce. The precious metal is nearing losses of around 7% so far in June, which would be its largest one-month fall since November 2016.

“Gold prices have been running hot since the end of 2019, intensified by the Covid-19 pandemic, so the current pullback to more sustainable levels is not that unusual.” Daniela Sabin Hathorn, analyst for DailyFX said. “There is likely to be more volatility on the horizon for gold prices as central banks remain the key focus of market participants.” she continued, pointing out that gold has moved in both directions month-by-month rather than consolidating since the pandemic began.

Asian equity markets fell on Tuesday as rising Covid-19 cases linked to the more contagious Delta variant triggered renewed lockdown restrictions. The Shanghai Composite and Tokyo’s Nikkei 225 dropped by 0.92% and 0.81% respectively, while Hong Kong’s Hang Seng index slid by 1.08%.

European markets meanwhile, inched higher, with Frankfurt’s DAX proving to be the top performing regional index, with a gain of 0.84%.

Brent crude oil fell for a second day ahead of the OPEC+ meeting later this week, which will see discussions about supply constraint policies. It was last trading at $73.99 per barrel, down 0.2%. WTI crude was last down 0.26% at $72.72 per barrel.