Global shares trade near record highs ahead of key US jobs data, while dollar strength keeps gold in check

JOHANNES EISELE/AFP via Getty Images

  • Global shares traded near record highs on Thursday as May US payroll data release nears.
  • Gold spot prices and futures dipped lower as the dollar regained strength.
  • Oil eased modestly, but still held near post-pandemic highs on Wednesday.
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Global shares traded near record highs on Thursday, as investors held on to their positions ahead of several key US data releases.A flurry of mostly positive economic data releases, including services and manufacturing activity around the world fed investor confidence.

Dow Jones futures dipped by 0.05% and S&P 500 futures were last down 0.06%. Nasdaq futures took a slightly bigger fall and were last trading 0.12% lower at 04:05 AM E.T.. The benchmark indices are around their highest levels on record this month.

Ahead of May's US non-farms payroll data release on Friday, a separate report on private payrolls is due later on Thursday, as well as weekly figures on unemployment claims. Deutsche Bank analysts expect private payrolls to have increased by around 750,000 in May.

"Meanwhile there's also the weekly initial jobless claims for the week through May 29, where our economists are expecting an increase to 435k after the previous week's post-pandemic low of 406k", Jim Reid, research strategist at Deutsche Bank, said.

"There'll also be focus on the employment components within the services ISM, after the manufacturing employment reading came in softer than expected," he said.

US 10 year Treasury yield was last at 1.601%, up 1.3 basis points on the day, while the dollar index rose 0.2%, set for its largest daily rise in a week.

As the US dollar regained strength, gold's rally slowed. Gold futures were last down 0.71% at $1,896.55 an ounce. The price of gold has risen by around 13% in the last three months and this week touched its highest level since the start of the year.

Whether gold will extend its recent rally and return to 2020's record highs above $2,000, or fall back will continue to depend on the dollar and wider economic developments, Rich Dvorak, analyst at DailyFx said.

"Gold prices might even be headed for all-time highs if the US dollar weakens further and Treasury yields extend their slide…If the US dollar stages a sharp rebound, however, it would likely correspond with a spike in Treasury bond yields caused by the market pricing in the threat of Fed tapering. That could weigh negatively on gold prices and spoil the recent rally." he said.

Oil continued its rally on Thursday after closing at post-pandemic highs on Wednesday. Brent crude was last trading at $71.60 per barrel, up 0.35% whilst WTI crude inched closer to the $70 mark after gaining 0.26%. It was last valued at $69.01 per barrel.

Asian markets reacted to a flurry of economic data including services and composite PMI numbers. Positive results in Japan pushed the Nikkei 225 higher as it closed 0.39% up. Hong Kong's Hang Seng Index however fell by 1.12% and China's Shanghai Composite closed 0.36% lower, reflecting weaker than expected PMI results.

European markets started lower on Thursday morning. The German DAX was last down 0.13%, whilst the Euro Stoxx 50 had lost 0.15% and London's FTSE 100 fell by 0.6% in the early hours of Thursday trading.

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