Today we will learn data from the US labor market (NFP). In addition to the employment statistics, attention may be drawn to the wage growth rate and the topic of a possible wage-price spiral in the US.
According to the market consensus, 530 thousand new jobs were expected to be added in the non-farm sector in November. Average hourly wages in annual terms were expected to grow by 5 percent last month, the fastest pace since February.
The above data may have a significant impact on the possible valuation of the pace of interest rate increases in the United States. This, in turn, could translate into the US dollar or precious metals, as well as stock market indices.
Three interest rate hikes in 2022?
After the latest turn from Jerome Powell, the head of the Federal Reserve, the market began to price the possibility of even three rate hikes in 2022. Expectations, therefore, seem very high.
More and more Fed policymakers are supporting policy normalization and preparing the ground for rate hikes to fight inflation. Mary Daly, Thomas Barkin and Raphael Bostic, Fed officials, in separate statements joined Fed Chair Jerome Powell on Thursday, who reiterated on Wednesday that the US central bank will discuss an early end to the pandemic-era stimulus at its December meeting while acknowledging that inflation could still remain above target for an extended period of time.
EUR/USD is attempting to stabilize in the 1.1300 area after earlier fairly sharp swings between 1.1380 and 1.1230.
OPEC+ sticks to plan
The OPEC+ alliance maintained plans to increase crude production by 400,000 barrels per day in January. This may have somewhat surprised the market, which was expecting rather a deviation from the plan and a reduction in production.
The alliance expressed that it was ready to quickly adjust its production plans if demand declines due to a new variant of coronavirus. Perhaps OPEC's decision was meant to reassure U.S. authorities, who had previously declared they were ready to reschedule the release of strategic crude reserves if prices began to fall.
Oil producers further reassured markets by saying they would reconvene, if necessary, before their next scheduled meeting on January 4 to review supply in light of developments related to the virus.
WTI crude oil appears to be on its way to a sixth consecutive weekly decline. On a monthly basis, the price is now down more than 15 percent, but there is a potential for a correction and a rebound in WTI prices above $68 per barrel.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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