There's no such thing as a quiet week in the markets these days and this week has undoubtedly been no different. The jobs report was always expected to be the highlight but the Bank of England gave it a good run for its money on Thursday, hiking by the most in 27 years while putting out some pretty dire economic forecasts. It would appear we have very little to look forward to for the next couple of years here in the UK. While I believe other central banks are slowly gravitating toward the economic reality of soaring energy costs, high and widespread inflation, and rapidly rising interest rates, the BoE has very much been at the forefront of accepting the country's fate. That's probably as much a reflection of the fundamental shortcomings as much as anything but the latest forecasts really were especially bleak and may make some other countries, particularly across Europe, a little nervous. The US may already be in a technical recession, depending on your definition, but the economy is still in very good shape. The jobs report is expected to show that once more today, with 250,000 jobs forecast to have been added last month leaving the unemployment rate at 3.6%. The question everyone is asking though is what constitutes an ideal jobs report. That may seem a silly question, but having drifted back into a "bad news is good news" environment where more rate hikes are to be feared as they may cause a recession but a recession is ok as it means potentially fewer rate hikes, it's no longer that straightforward. With that in mind, perhaps the goldilocks report is one in which payrolls are strong but not overly so (so in line with forecasts), unemployment remains low but wage growth moderates a little. That would certainly fit the narrative of not a real recession while a slight moderation of wage growth could help build a case for inflation indicators easing, allowing for slower hikes into the end of the year. Of course, there are many other factors at play but with oil 20% off its highs and supply chains improving, the Fed may feel that pressures are abating. Of course, a decline in the headline figure is what it ultimately wants to see and there'll be a couple of opportunities at that before the next meeting in September. Oil slips below $90 as recession fears mount Oil prices are marginally higher on Friday after spending most of the week on the decline. It hasn't been the most bullish week of headlines for crude, whether that be all of the recession chat (most notably from the UK), the new OPEC+ deal or the EIA inventory build. The headlines have all been negative and so the price has continued to fall. WTI has broken below $90 to trade back at levels seen before the Russian invasion of Ukraine. Clearly, everyone is taking the threat of recession far more seriously as we're still seeing a very tight market and producers with no capacity to change that, barring a couple. Gold eyeing $1,800 ahead of the jobs report It's been another very good week for gold, despite Fed policymakers coming out in force to try and spoil the party. It seems traders are not particularly interested in being told that rates won't start falling towards the middle of next year or could still rise by 75 basis points in September despite the shift to data dependency. I mean, considering who's been right this past 12 months, I can hardly blame them. But gold has certainly benefited and the next challenge is $1,780-1,800 which is putting up quite the fight. Bitcoin only gets a mild lift from the Blackrock deal There was, what has become, a rare good news headline for bitcoin on Thursday after Coinbase was chosen to provide crypto services to Blackrock's clients. This is a big show of support for an asset class that's had a frankly terrible year so far. But clearly, there remains strong demand for cryptos which bodes well for the future. In the near-term, it's not provided much of a lift which is perhaps a little surprising given how much the space has craved some more positive headlines recently but perhaps that's a sign of the environment. Bitcoin continues to trade around $23,000, with a break above $25,000 now the next big test to the upside.

In this week’s Live from the Vault, Andrew Maguire is joined once again by Craig Hemke, founder of the TF Metals Report, to discuss the Fed’s refusal to accept the US is slipping into a recession. The two industry allies contemplate the approaching end of the COMEX’s confidence scheme, as investors wake up to widespread spoofing and join the mass exodus to fairer alternatives.

The price of the Australian Dollar almost stabilized on Friday. The Moving Average indicator maintains its bullish price signals. The momentum oscillator, the Relative Strength Index, remains within its normal zone; rising momentum will confirm the continuation of the uptrend. During today's European session, the AUD/USD pair traded inside a tight range. without making any significant breakthrough. Therefore, the difference between the day's high and low did not surpass 30 pips. At press time, the AUD/USD was trading at 0.6950, down 0.0020 or 0.29% for the intraday. This analysis relies on a 4-hour timeframe On a four-hour timeframe, the Moving Average Indicator reading reveals bullish signals. The signal indicates the continuance of the bullish trend in the short term. whereas the 50-MA rises above the 100-MA. In the meantime, the 100-MA rises above the 200-MA, supporting the bullish trend over the longer period. With a score of 52.8 on the value line, the Relative Strength Index remains in the neutral range. Any increase in the RSI would protect the Australian dollar from sliding back below the descending trendline. During the preceding two trading sessions, the AUD/USD exchange rate has been quite stable. Therefore, if the AUD/USD wants to maintain its positive trajectory, the Aussie must break through the first resistance level at 0.6962. A successful break of the indicated level would pave the way for yesterday's high of 0.6999. If the price is capable of closing the 4-hour candlestick above yesterday's high, that will shift market participants' focus to the 0.7032 level, followed by the 0.7070 resistance level, which prevented the bullish trend continuation on Monday. Alternatively, if the market is unable to advance over the resistance level of 0.6962, that may cause the price to slide toward the support level of 0.6921. A successful breach of the previously mentioned level would allow the price to retest the 0.6892 support level, which coincides with the descending trend line. A breach of this level would expose the support levels at 0.6860, followed by a 0.6835 support level. Note: When a resistance level is broken, it becomes a support level since the price will trade above it, and vice versa. Alternatively, the market may perform a false breakout or rebound after breaking support, or vice versa. Additionally, the market could bounce from any level of support or decline after breaking any level of resistance.

Summary If the U.S. economy is in a recession, no one seems to have told employers. Nonfarm payroll growth in July was more than double the Bloomberg consensus, registering a 528K monthly gain. This marked the second fastest pace of job growth in 2022. Employment growth was broad-based with nearly all major sectors adding jobs in the month. Average hourly earnings data added further fuel to the fire, increasing 0.5% in the month and 5.2% over the past year. The unemployment rate fell a tenth of a percentage point to 3.5%, which matches the 50-year low reached in 2019. Broadly speaking, the economic data are sending mixed messages at present, and the white-hot payroll numbers look increasingly out-of-line with other data points. That said, employment growth of more than half a million jobs per month and a falling unemployment rate are hard to ignore, and we suspect this data will give the FOMC the confidence it needs to push ahead aggressively with its fight against inflation. At least a 50 bps rate hike at the September 20-21 FOMC meeting seems likely at this point in time, and yet another 75 bps hike could be in store if inflation over the next two CPI reports shows no signs of trending lower. Download the full report

The US economy created 528K new jobs in July, doubling expectations and exceeding the peak employment level set before the pandemic. Notably, construction and manufacturing recovered, probably due to falling commodity prices in these sectors. The hourly earning rate has maintained at 5.2% y/y with an upward revision of the previous month and a gain of 0.5% for July. The unemployment rate declined from 3.6% to 3.5%, but this is mainly due to a decline in the active labour force from 62.2% to 62.1%. Such strong employment growth data came as a surprise to the markets. And understandably so, with the latest economic assessments betraying this picture. Weekly jobless claims have remained on an upward trend since March, and this divergence is not easy to explain. A solid increase in employment plus faster wage growth is raising expectations of a third consecutive 75 points Fed rate hike in September. CME's FedWatch tool shows a 69% chance of such a move, double that of a day ago versus 3.4% a month ago. This is obviously positive news for the dollar and negative for the stock market. Earlier in the week, Fed officials promoted the idea that markets were underestimating the central bank's hawkishness. With factual evidence of the economy's strength, investors may return to buying the dollar, betting on continuing extreme policy tightening.

Summary The Reserve Bank of Australia (RBA) raised its Cash Rate by 50 bps to 1.85% at its August meeting and signaled that further rate hikes will be needed to bring inflation back toward target over time. Several elements of the monetary policy announcement were essentially unchanged from previous meetings. However, there were also some important changes in language that lead us to believe the RBA will revert to smaller hikes going forward. Notably, the central bank indicated that while further normalization of policy is expected in the months ahead, it also noted that policy is "not on a pre-set path". The RBA also dropped references to "extraordinary monetary support" that had appeared in previous announcements, suggesting it now sees itself a bit further along the monetary tightening path, and perhaps does not need to move at an accelerated 50 bps pace anymore. Given these changes, we believe the RBA will be more flexible moving forward with regard to the size and timing of future rate hikes. With signals of further tightening but more flexibility, we now expect 25 bps rate hikes at the RBA's next several meetings in September, October, November, December and February, which would see the Cash Rate peak at 3.10% by early next year. View the full report