Noor Capital | Interview with Mohammed Hashad on Dubai TV – July 07, 2023

Dubai TV interviewed Mohammed Hashad, Director of Research and Development at Noor Capital and member of the US Association of Technical Analysts, to comment on the US Non-Farm Payrolls report, which is a monthly report that the markets are closely awaiting.

Asked whether it is expected to witness a decline in employment rates, or a decrease in the rate of job opportunities, and what scenario might the Federal Reserve follow regarding the latest reading of the employment data during the looming monetary policy meeting in July, Hashad answered, “Last month, the US economy was able to add 339,000 new jobs, and expectations indicate today that only about 224,000 jobs will be added. There are several factors that we must take into account, which is that the reading of US jobless claims last month, that was negative, and the job turnover rate that also came in negative. This gives us the perception that the labour market is beginning to be affected by the interest rate hike.”

Hashad talked about positive scenarios, if jobs data comes out better than expectations with unemployment rates falling below 3.5 and wage growth continues at a strong pace, adding: “I think this will help the Federal Reserve to continue monetary tightening. But if the data comes out negative, I think the Fed has to hold interest rates unchanged and will wait for the next inflation data to make a decision”.

On the escalation of tensions between the two largest economies, the US and China, and whether there is a scenario for US-Chinese relations to impact global markets in the foreseeable future, Hashad replied that the financial markets have already become accustomed to this kind of disagreement between the US and the Chinese, and the recent disagreements began since the announcement by China, in the past few weeks, that there is a desire to control semiconductor exports.

Hashad believes that Treasury Secretary Janet Yellen’s visit to Beijing today will not add anything new, but the visit comes in the context of proving good intentions and she wants to say that the US economy does not want to completely detach from the Chinese economy, however, the US wants diversification and Yellen objects only to taxes on minerals and metals that are vital to US companies.

With regard to gold prices, after the markets witnessed noticeable declines yesterday, Thursday, but today gold is bouncing within the green zone, so what are the most prominent expectations for gold prices?
Hashad suggests that the US dollar maintained its strength, gold prices witnessed yesterday a decline at the level of 1900 US dollars per ounce, amid the continued rise of the dollar followed by the continuation of the rise in US Treasury yields. Hashad also indicated that markets also witnessed a rise in the yields of two-year Treasury bonds to their highest level since 2007, an increase of more than 5%, and this in turn puts pressure on gold, and finally also the continuation of the hawkish stance expressed by Fed Chair Jerome Powell in his recent statement that Fed members want to continue raising interest rates, and therefore expectations rose in the markets that there will be no cut in interest rates until May of 2024.