Market Drivers – US Session 02/12/2022

The weaker US dollar and risk aversion were in news headlines most of the time during Friday’s US trading session. The positive employment report on the United States suggested the Fed might need to keep hiking rates to ease a contracted labour market, though it failed to reinforce the US dollar.

Economic Data

NFP data for November surprised the financial markets to the upside and the October figure was revised higher, indicating that the US labour market continues to show signs of good resilience despite tightening financial conditions. What can exactly concern Fed members is the month on month and year on year rise in average hourly wage growth.

Other Developments

Despite the strong market reaction on Friday, following the EU decision concerning capping Russia oil, some experts have noted that price caps could have minimal impact on the oil market in the near future. If Russia decides to withhold barrels from the market, then the chances of a price surge go up. According to an EU document with details of the cap, the price limit will be regularly reviewed to analyze effects on the market, but would remain “at least 5% below the average market price.”

Gold closed the week in positive territory despite Friday’s pullback. XAU/USD eyes a break above $1,800 as preserves its bullish bias, the precious metal closed at $1802 per ounce.

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