The US payroll effect is causing trading volume compression, and liquidity remains very low.
Most US economists suggest the report takes on added significance as it is the last before the July 31 FOMC meeting 1) headline payrolls: (2) hours worked (3) Wages will all count.
The Korean Won
USD/KRW is trading bid on the back of weak Samsung (KS:005930) results in Q2. Still, markets remain rangy as the topside move should get neutralised by the dovish Fed.
The Philippine Peso
Headline CPI rose 2.7% y-o-y in June after 3.2%
Tepid inflation suggests that the Bangko Sentral ng Pilipinas.'(BSP) will turn its attention to growth and this support the view that the BSP will start an easing cycle as local central banks are offered up more policy wiggle room from the dovish Fed, and this is consistent with our chase for yield narrative.
Gold should do well coming out of NFP, and breaking rank with the market consensus; one positive payroll print should not change the sense of urgency central banks around the world must feel, none more so than the FED, with the global manufacturing PMI prints flashing red not to motion dormant inflation.
The shallow liquidity conditions if persist heading into the US payrolls later today could be a bit disconcerting for Long gold positions as the market does not want to give up its "risk-on "view as expressed through global equity markets.