US markets trade modestly higher on jobs data

US stocks closed in the green as the latest jobs data, provided further evidence that the economy is losing momentum and keeping the door open to rate cuts.

The Dow climbed 0.36 per cent on the day. The S&P 500 finished 0.15 per cent higher and the Nasdaq closed up 0.17 per cent.

The state of the jobs market was the key topic of the day for investors. Data released by the Labor Department showed 8.059 million vacancies in April, the lowest level in more than three years and below consensus expectations of 8.4 million. Traders are now pricing in a nearly 62 per cent likelihood of two rate cuts this year, up from roughly 36 per cent a week ago, according to the CME FedWatch Tool.

Investors remain focused on the crucial nonfarm payrolls report for May which is due out on Friday US time.

Following the jobs data treasury yields traded lower, with the rate on the benchmark 10-year note slipping about 7 basis points.

In company news, Bath & Body Works was the worst-performing stock in the S&P 500, falling 13 per cent after the company provided softer than expected guidance.

Global central banks are increasingly favouring the US dollar, with a net 18 per cent planning to boost their dollar allocation over the next one to two years, up from 6 per cent last year. This trend, revealed in a survey by the Official Monetary and Financial Institutions Forum, reflects confidence in high US interest rates.

In commodity related news, central banks increased gold purchases to 33 metric tons in April, up from 3 tons in March, despite high prices. This reflects sustained demand amid geopolitical and economic uncertainty. Turkey, China, India, and Kazakhstan lead in gold buying this year.

Oil extended its losses with WTI closing below $73 following OPEC+ unexpected plans to return some supplies to the market later in the year.

Turning to US sectors, they were mixed overnight. Real Estate, Consumer Staples and Tech were the top performers, whilst Energy and Materials lagged behind.

Futures

The SPI futures are pointing to a 0.1 per cent fall.

Currency

One Australian dollar at 7.35am was buying 66.49 US cents.

Commodities

Gold has lost 0.92 per cent. Silver has dropped 3.79 per cent. Copper has fallen 2.80 per cent. Oil has dropped 1.31 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.37 per cent, Frankfurt lost 1.09 per cent, and Paris closed 0.75 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei fell 0.22 per cent, Hong Kong’s Hang Seng added 0.22 per cent while China’s Shanghai Composite closed 0.41 per cent higher.

Yesterday, the Australian share market closed 0.31 per cent lower at 7,737.06.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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