Tuesday, June 18, 2024

Market update: gold and silver struggling to push higher

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US rate cut expectations are being pushed back further, after Friday’s forecast beating NFPs showed the US labor market in robust health. The first 25 bp cut is not fully priced-in until the December meeting although the November meeting is a live option. In total, 38 bp cuts are seen this year, suggesting that it is currently a coin toss between one of two moves.

US dollar jumps after NFPs thump expectations

Friday’s US Jobs report shocked the market and sent US treasury yields spinning higher and gold and silver sliding lower.

Later this week we have May consumer and producer inflation, while the latest FOMC meeting will see all policy settings left untouched. The FOMC press conference may give some clues as to the Fed’s current thinking, along with the latest Summary of Economic Projections (dot plot).

US treasury yields jumped late Friday with the rate-sensitive UST 2-year adding 15bp after the jobs data.

US treasury 2-year yield chart

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