China to levy tariffs on US oil and gas starting Monday

Markets stabilise ahead of Non-Farm Payrolls. The Dollar closed flat yesterday as traders patiently await the latest round of US employment data. The ADP employment figures published on Wednesday revealed an additional 183k new jobs, beating expectations of just 150k. The report sets the stage for the NFP release later today. Gold also receded from Wednesday’s all-time high, falling 0.4% yesterday to close at $2,856 an ounce.

Oil prices fell to their lowest of the year on Thursday, with Brent Crude sinking to $74 a barrel and WTI treading water above $70. A number of factors are weighing on crude prices, most recently China announcing that will begin levying tariffs on US oil and gas from next Monday. The measure can be viewed as a retaliatory response to the fresh tariffs imposed on Chinese goods imported into the US. Weak demand in the world’s second largest economy continues to be a worrying factor for oil prices, as do global demand forecasts in general. Unexpected increases in US stockpiles also contributed to poor price action this week.

In a widely anticipated move, the Bank of England elected to reduce interest rates on the Pound on Thursday, from 4.75% down to 4.5%. The decision was announced alongside the latest UK growth forecasts, which were surprisingly grim. The BoE now expects the UK economy to grow by just 0.75% in 2025, half what it was predicting three months ago. Cable fell the better part of a cent down to $1.243 by yesterday’s close.

Very little on the calendar today except for the aforementioned Non-Farm Payrolls. Current expectations are for 170k new jobs and a 4.1% unemployment rate. Time will tell.