U.S. Nonfarm Payrolls, U.S. Unemployment Rate, U.S. Consumer Credit

The US dollar fell against most major currencies on Thursday, with the USDX down by another 0.10%. This marks its fourth daily decline this week, with the dollar hovering around four-month lows ahead of key nonfarm payrolls data, which is set to provide more cues on interest rates.

Elsewhere, the ECB reduced interest rates again, now setting the deposit rate at 2.5%, aiming to support a slowing economy and manage declining inflation. However, the bank expressed significant concern about future inflation risks, particularly from trade tensions and rising defense expenditures, raising the possibility of a pause in their easing cycle.

Thursday saw Wall Street's negative sentiment persist, with all three major stock indices closing with substantial losses. This downturn was likely influenced by uncertainty surrounding U.S. trade policy, as well as a general decline in stocks and risk currencies, although the bond market's intense selloff eased. Focus for financial markets later in the day will be on the U.S. nonfarm payrolls report, followed by a speech from Federal Reserve Chair Jerome Powell, which could provide more clarity on the outlook for rates in the world's biggest economy. In corporate news Deutsche Post, Miniso and Air France KLM will publish their quarterly earnings reports

On the cryptos front, U.S. President Trump signed an executive order establishing a strategic Bitcoin reserve. This reserve, announced a day before a White House meeting with cryptocurrency industry leaders, will be funded by Bitcoin seized through federal asset forfeiture, as confirmed by White House crypto czar David Sacks.

Despite this turn of events, the two main cryptocurrencies by market capitalization, Bitcoin and Ethereum ended Thursday’s session lower by 0.75% and 1.74% respectively. Crypto traders could be watching closely for Friday’s White House crypto summit. To foster cryptocurrency growth and provide the industry with much-desired legitimacy, the president's 'crypto czar' David Sacks has convened a meeting of key figures in the space, including founders, CEOs, investors, and Trump working group members.

Friday's U.S. Nonfarm Payrolls report for February is expected to reveal 160,000 new jobs (up from 143,000). This report could provide crucial insights into the health of the U.S. economy. While the labor market has been robust, any indication of a slowdown could significantly impact market sentiment. Some price action could also be observed upon the release of the unemployment rate and consumer credit numbers from the U.S.

EUR/USD

EUR/USD attempted a fourth consecutive day of gains but faced a sharp rejection at 1.0850 on Thursday, snapping its three-day winning streak. Markets are turning cautious ahead of Friday’s crucial US Nonfarm Payrolls (NFP) report.

Shifting interest rate expectations have driven recent volatility. The European Central Bank (ECB) cut rates by 25 bps but is now expected to ease only once more in 2025, tightening the Euro’s interest rate outlook. Meanwhile, persistent inflation in both the EU and US continues to limit central banks' ability to cut rates further.

Adding to market uncertainty, former US President Donald Trump announced a temporary suspension of tariffs under the USMCA agreement. However, concerns over inflation and economic slowdown persist. Friday’s NFP report will be a key event, with investors watching for signs of labor market weakness and its impact on rate decisions.

Gold

Gold’s three-day rally came to a halt on Thursday as investors booked profits ahead of the key US Nonfarm Payrolls (NFP) report. A rise in US Treasury yields further weighed on XAU/USD, making the non-yielding metal less attractive.

Market uncertainty persists amid trade policy concerns, with former US President Donald Trump proposing tariffs that have triggered retaliatory measures from Canada and China. Mexico secured a temporary one-month delay until April 2 after discussions with President Claudia Sheinbaum.

Thursday’s US economic data was mixed. The Challenger jobs report showed layoffs surged to recession-era levels, while jobless claims came in lower than expected, easing recession fears.

US 500

The US 500 fell nearly 1.40% on Thursday as investors remained cautious despite former U.S. President Donald Trump granting a temporary reprieve on tariffs for Mexico and Canada. The move failed to ease market concerns, with investors waiting for further clarity regarding trade policies.

Economic data showed U.S. jobless claims fell more than expected to 221,000, signaling labor market resilience. However, Philadelphia Fed President Patrick Harker warned of growing economic risks, particularly in consumer spending and inflation.

With tariff concerns and rising raw material costs threatening to push inflation higher, investors are now focused on Friday’s crucial U.S. Nonfarm Payrolls report. The data will provide key insights into the economy’s strength and influence the Federal Reserve’s next steps on interest rates.

WTI Oil

Oil prices remained largely unchanged on Thursday in volatile trading, . Market pressure stemmed from escalating U.S. tariffs on Canada and China, coupled with OPEC+’s decision to raise output for the first time since 2022.

Brent briefly hit its lowest level since December 2021 following a larger-than-expected U.S. crude inventory build. Meanwhile, Russia signaled openness to a Ukraine peace deal, adding another layer of market uncertainty.

Trade tensions persist as former U.S. President Donald Trump granted a temporary tariff exemption for Canadian and Mexican goods under the USMCA, with potential relief for Canadian energy imports under discussion.

On the upside, the U.S. ramped up sanctions on Iran, aiming to collapse its oil exports.

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