somrat4030
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April-02, 2022, US Economical Updates and Market Analysis, By Forex Forum.
Inflation, gas prices and geopolitics
Americans had to deal with a lot in the first three months of 2022.
Coronavirus cases surged at the start of the year as the highly infectious Omicron variant took hold, rampant inflation showed no sign of abating, prices at the gas pump surged -- and then Russia invaded Ukraine, throwing the global economy for a loop.
While the Omicron surge did abate, there's already a new variant to worry about. The other fear factors of early 2022, however, continue to cast their shadow as the second quarter begins. This confluence of anxiety-inducing factors obscures how well things were actually going.
Inflation is at the highest level in 40 years, outpacing the strong wage gains necessitated by the labor shortage.
Consumer sentiment fell to its lowest level since August 2011 in March as US families worry about what their finances might look like in the year ahead.
On the other hand, Gold began April trading with a fairly large slide on the week as the U.S. unemployment rate fell despite an underwhelming monthly addition in jobs that suggested the economy might not fare too badly — reducing the need for investors to rely on safe havens.
The front-month gold futures contract on New York's Comex settled down $30.10, or 1.5%, at $1,919.20 an ounce. For the week, it fell 1.8%, its second biggest weekly decline in three that contrasted with its first quarter gain of 6.6%.
Gold typically serves as a hedge against economic and political troubles. In March, Comex's front-month contract got to as high as $2,070 — just $42 from rewriting below the August 2020 record high of $2,121 — amid turbocharged U.S. inflation and a bubbling of geopolitical tensions right after Russia's invasion of Ukraine.
On Friday though, gold fell as the U.S. jobless rate improved to 3.6% in March from 3.8% in February despite jobs growth for the month coming in at 431,000 — some 12% below economists' expectations.
A jobless rate of 4% and below is defined by the Federal Reserve as "full employment." The United States has technically had full employment since December when the jobless rate fell to 3.9%.
Elesewhere, Stock indexes edged higher on Wall Street while Treasury yields soared, after a healthy report on the U.S. job market strengthened expectations for coming interest rate hikes. The S&P 500 rose 0.2% in afternoon trading, after wavering between small gains and losses earlier. The index is on track for a weekly loss following two weeks of gains. The two-year Treasury yield approached its highest level in more than three years after a report showed the labor market remained strong in February. It again topped the 10-year yield, an unusual even that's historically been an ominous sign for the economy.
Moreover, US stocks edged lower in noon trading on strong growth in employment for March.
At midday, the Dow fell 59 points to 34,620, while the S&P 500 eased 14 points at 4,517 and the tech-heavy Nasdaq slipped 58 points to 14,162.
Economic data released on Friday showed the US economy created 431,000 jobs during March, although fewer than expected.
"With some sentiment indicators in the US pointing in the wrong direction, the jobs data also came in weaker than expected, but not as bad as many would have feared given the backdrop," Premier Miton Investors chief investment officer Neil Birrell said.
Oil Market Updates
On the other hand, The UK will join the US in releasing more oil from its reserves as part of a joint effort to lower prices and reduce reliance on Russian supplies, two people familiar with the matter said.US President Joe Biden on Thursday said his plans to release a million barrels of oil a day for six months would lay the foundations for the US to achieve energy independence from foreign suppliers.
Member countries of the International Energy Agency committed to another coordinated oil release in an extraordinary meeting on Friday, according to Japan's industry ministry. For comparison, a month ago, IEA members agreed on a 61.7-million barrel release, with 30 million coming from the US and 2.2 million from the UK. REUTERS
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