Bumpy ride ahead for the ASX as investors eye U.S. jobs data

August 5, 2022 - 2 weeks ago

After dodging many obstacles this week, including the Reserve Bank of Australia 50-basis point interest rate hike, the Australian share market is poised for a mixed opening as traders awaited Friday’s July U.S. jobs report, which will give the latest snapshot on the labour market and the health of the economy.

The ASX futures rose +8 points, or +0.47%, to 6,893, while our local currency, the Australian Dollar, is currently buying US$0.6960 (as of writing).

Following a mixed session on Wall Street, U.S. stocks ended in a dull session Thursday as gains in high-growth stocks offset losses in energy shares.

Later Friday, the U.S. Labour Department’s jobs report is expected to show whether employers kept hiring in July after 372,000 jobs were added in June, with the forecast currently holding at 250,000, and the unemployment rate is expected to hold steady at a historic low of 3.6%.

At the finishing bell on the New York Stock Exchange (NYSE), the blue-chip Dow Jones Industrial Average fell -85.68 points, or -0.3%, to 32,726.82.

The broad-based Standard & Poor’s 500 Index slid -3.23 points, or less than -0.1%, to 4,151.94, while the rich-tech Nasdaq Composite Index gained +52.42 points, or +0.4%, to 12,720.58.

In other news, on Thursday, as widely expected, the Bank of England hiked rates by half a percentage point (50 basis points) to 1.75% from 1.25%.

The US dollar index (US DXY), which tracks the greenback against a basket of its peers, tumbled by -0.64% to 105.60.

Precious metals were firmer, with spot gold rising by +1.5% to $1,792 and silver added +0.6% to $20.20.

Meanwhile, oil prices fell to their lowest levels since the Russian invasion of Ukraine.

The global oil benchmark Brent crude was at $94.34 per barrel for a -2.6% loss, while U.S. benchmark West Texas Intermediate (WTI) was at $88.54 — down -2%.

Iron ore prices were down -4% to US$103.80 a tonne, while cryptocurrencies Bitcoin, the world’s largest cryptocurrency by market value, slipped by -1.5% and is trading at US$22,555.00 (as of writing).

Based on the daily technical assessment of the S&P/ASX 200 (XJO), a mixed opening is foreseen, with the intraday resistance at 6,995 minor, with 7,025 seen above. Reassess from there.

Assessing the downside, the support is observed at 6,965 minor, with 6,910-15 located beneath. Reassess from there.

Daily outlook on the benchmark S&P/ASX 200