For precious metals, the last 5 trading days have not exactly been overly exciting. We didn’t receive much in the way of economic data, and with most investors focusing on April’s Labor Department report on employment, there wasn’t all that much else being talked about. Despite beginning the week solidly, metals quickly faded to the background by Wednesday and Thursday.
News From Around the World
Like was stated above, there really wasn’t much in the way of global economic news to talk about and discuss. China published some economic data this week, but it was mostly in line with expectations and did not do much in the way of affecting spot values.
According to many people, the eyes of the investing world will continue to be on China as its central bank ponders new monetary-easing initiatives. You see, the Chinese economy has not performed well in recent months and China’s central bank is making moves to correct this economic slowdown. Though no major shifts in policy were recorded over the last few weeks, a lot of people feel as though another monetary policy shift may happen sometime in the near future.
From Australia, it was reported earlier in the week that the central bank of Australia reduced its main interest rate considerably. Despite this somewhat shocking report, no one really reacted and the news was more of a miss than anything.
We also are keeping a close eye on Greek debt negotiations, though no major developments have taken place this week. Still, no deal has been reached between the EU/IMF and Greece, so we will have to keep watching what happens with Greece.
Plenty of Employment Data
This week, though lacking from a general economic data standpoint, brought us a lot in the way of employment data from the United States. While the week concluded with the Labor Department’s report on April job growth, a few pieces of data preceded that report.
On Wednesday, the market was dealt the most recent ADP report on April employment. According to the report, only a little more than 140,000 jobs were added to the economy last month. Compared to expectations of more than 220,000 jobs to have been created, it was clear to see that the report was a big miss. In the immediate aftermath of the ADP report many, many investors were convinced that Friday’s Labor Department report was going to fall well short of expectations.
Only a day later, on Thursday, those nerves were calmed a bit thanks to an upbeat reading on weekly jobless claims. According to the data, last week saw very few people apply for unemployment benefits, so few people, in fact, that the previous weeks’ 15-year low was upheld. This helped give investors some confidence that today’s report might actually come close to living up to expectations.
Finally, today brought about the report that everyone was waiting for. According to the Labor Department’s data, more than 220,000 new non-farm jobs were created during the month of April. Expectations were for a job increase of 220,000, so today’s data falls right in line with expectations and definitely benefits the monetary policy hawks who would like to see interest rates raised sooner rather than later. In addition to a healthy number of jobs being created last month, the market also saw the overall unemployment rate drop to 5.4%.
Though all this employment data is good for monetary policy hawks, it in no way guarantees the hiking of interest rates this summer. The Fed is looking at much more than employment data to make this decision, so it will be interesting to see what they think of this latest batch of US employment data.