Global stock markets rally ahead of US non-farm payrolls, driven by hopes of a dovish Fed pivot. The US dollar retreats, while Asia Pacific stocks show a positive follow-through.
Global stocks and Gold rallied with a softer US dollar ahead of NFP
Global stock markets rose ahead of today’s key risk event, the release of the US non-farm payrolls data and unemployment rate for August, which may reinforce the current sluggish US labour market condition, in turn, increasing the probability and urgency of a Fed dovish pivot in September.
The S&P 500 soared for a second consecutive session on Thursday, 5 September, to record a gain of 0.8% to close at 6,502, just a whisker away from the current all-time high of 6,508 printed on 28 August. The top performer among the US stock indices was the small-cap Russell 2000, which rallied by 1.26%. The Nasdaq 100 and Dow Jones Industrial Average added gains of 0.9% and 0.8% respectively.
Yesterday’s two sets of US labour data came in softer than expected, with weekly initial jobless claims for the week ended 30 September and the ADP employment report for August both undershooting forecasts.
Hence, the latest data from the CME FedWatch tool now indicates an almost 100% chance that the US Federal Reserve will likely cut the Fed Funds rate by 25 basis points (bps) to 4.00%-4.24% on September 17. The next 25 bps cut may be brought forward earlier to 29 October from 10 December, with a 57% chance at the time of writing.
The US dollar reacted negatively in anticipation of a more dovish Fed, as the US Dollar Index shed 0.1% in today’s Asia session, led by the NZD (+0.3%) and JPY (+0.2%).
Asia Pacific stock markets have also shown a positive follow-through so far. Singapore’s Straits Times Index rose by 0.2% to record a fresh all-time intraday high of 4,320 at the time of writing. Australia’s ASX 200 recorded an intraday rally of 0.4% led by consumer discretionary stocks.
China and Hong Kong stocks ended a three-day losing streak, supported by positive news that China’s DeepSeek is developing a more advanced AI agent model to rival US-based OpenAI. Hong Kong’s Hang Seng Index and China’s CSI 300 advanced by 0.7% and 0.9% respectively.
Gold (XAU/USD)’s short-term bullish trend remains intact as it trimmed yesterday’s intraday sell-off of -1.3% to end the US session with a marginal loss of -0.4%. In today’s Asia session, Gold managed to recover with an intraday gain of 0.4%, trading above its key short-term support of US$3,500.
Our YouTube video above contains the latest intraday technical analysis on the US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
