The European markets fell ahead of European PMIs and the US job report
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The European markets fell ahead of European PMIs and the US job report

While the gold price remains close to its monthly high, it is struggling to extend its two-day uptrend amid market jitters ahead of Friday's release of the US employment report while UK markets are on holiday. This is one of the thermometers, along with inflation, used by the US Federal Reserve to gauge the health of the US economy.

If the US employment market slows, investors are hoping the Federal Reserve will take a less aggressive policy stance. This can also prepare traders for any change in stance from the European Central Bank at its meeting next week. As a result of record-high inflation in the eurozone this week, bets have been placed that the ECB may be forced to tighten sooner or raise rates more. So far, the central bank has indicated that it will start raising interest rates in July to reach 2% or higher by September.

Oil slide after OPEC+ meeting

Oil prices are slightly lower on Friday after the meeting of the Organization of Petroleum Exporting Countries and its allies, called OPEC+ on Thursday. Saudi Arabia and other OPEC+ states agree to boost oil production to offset Russian output losses, easing oil prices and inflation and paving the way for a trip to Riyadh by US President Joe Biden.

OPEC+ has agreed to increase production by 648,000 barrels per day (bpd) in July and by a similar amount in August compared to the initial plan to add 432,000 bpd a month over three months until September. After months of pressure from the West, Saudi Arabia and other OPEC Gulf nations will be seen as willing to increase pumping after West sanctions against Russia have worsened energy shortages worldwide.

Events of today

The May US employment report will be released on Friday. There are expected to be 325,000 new nonfarm payrolls created in May, down from the previous month, and the unemployment rate will drop to 3.5% from 3.6% in April.

Additionally, markets await the major macroeconomic data releases in Europe, including the exports, imports, and trade balance for Germany; industrial production for France, along with composite and services PMIs for Spain, France, Italy, Germany, and the Eurozone.

In the US, the focus will be on the Services Purchasing Managers Index and Baker Hughes oil rig counts.