Equities correct Thursday's losses, CAD flat ahead of labor market data

09/07/2021

It looks like volatility will continue today as US bonds continue to stage wild swings, which is somewhat unusual for this safe-haven asset.

The 10-year yield dropped below the long-term uptrend line yesterday, potentially ending the recent bullish trend in yields. 

Earlier in the day, the UK GDP for May showed a growth of just 0.8% on the month, a steep slowdown from 2.0% growth in the previous month. In addition, manufacturing output fell 0.1% in May, while industrial production rose 0.8%, both much weaker than expected.

Later in the session, both the ECB and BoE governors will participate in a panel discussion titled "Digitalisation, intangibles and potential growth in a post-COVID world" at the Global Forum on Productivity in Venice.

Forex traders will also pay attention to the Canadian labor market data, with the unemployment rate expected to improve notably, from 8.2% to 7.8%. At the same time, the employment change is seen bouncing to 172,000 from -68,000 in the previous month. That might boost the Canadian dollar and send the USDCAD pair below the 1.25 level. 

Elsewhere, stocks are correcting yesterday's losses, with EU indices trading circa 1% higher, while US benchmarks lag slightly. 

Gold and silver are without a clear direction, anchoring gold to 1,800 USD and silver to 26 USD. 
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