Daily Digest Market Movers: Gold price is underpinned by a dovish Fed-inspired fall in the US bond yields and the USD
- The Job Openings and Labor Turnover Survey (JOLTS) published by the US Bureau of Labor Statistics showed that job openings fell to 7.673 million in July, or the lowest level since January 2021.
- Adding to this, the reading for June was revised lower to show there were 7.910 million unfilled positions against the previously reported 8.184 million, further pointing to a softening labor market.
- Furthermore, the Federal Reserve’s Beige Book revealed that nine out of 12 regional districts reported flat or declining economic activity in August, up from five that reported weak conditions in mid-July.
- Meanwhile, Atlanta Federal Reserve President Raphael Bostic said that price pressures are diminishing quickly and that the US central bank must not maintain a restrictive policy stance for too long.
- Separately, San Francisco Fed President Mary Daly said that the central bank needs to cut rates to keep the labor market healthy, but it is now down to incoming data to determine by how much.
- According to the CME Group's FedWatch Tool, markets are pricing in around a 45% chance that the Fed will lower borrowing costs by 50 basis points at the upcoming policy meeting on September 17-18.
- The dovish outlook drags the yield on the rate-sensitive two-year US government bond to its lowest level since May 2023 and the benchmark 10-year US Treasury yield to its lowest since July 2023.
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