The European morning was quiet, with no significant news or data releases. Members of the European Central Bank discussed inflation and a soft landing but did not provide new guidance, maintaining the outlook for at least one more rate cut. Bloomberg reported that the Bank of Japan might reduce its bond-buying efforts, though not as much as expected, which would usually weaken the yen. However, the market reacted slightly. Traders are mostly focused on the upcoming US NFP report and are keeping a calm approach.

Musk and Trump Disagreement

There was a minor market disruption due to a disagreement between Musk and Trump, but things returned to normal after Trump mentioned progress in their relationship. Reports indicate that White House aides are planning a call with Musk on Friday, but some sources denied that anything is confirmed. In the American session, the spotlight will be on Canadian employment data and the US NFP report. Additionally, news regarding Musk and Trump might affect market trends. Currently, US stocks and bitcoin are bouncing back from previous losses. So far in Europe, we haven’t seen developments that usually move the markets. European Central Bank policymakers shared their views on inflation and future rate adjustments, but there were no clear changes in their position. They still expect at least one more rate cut, but the timing will depend on data. This lack of new information has kept euro rates steady. In Asia, Bloomberg reported that Japan’s central bank might reduce bond purchases, but not as much as anticipated. Typically, this would put pressure on the yen as it shows a continued dovish stance. Yet, price movements remained calm. This suggests the market may have already considered a slower reduction in policy support, and traders are holding back on new positions before the big US reports are released. Thus, it’s no surprise that yen pairs have not moved much.

Anticipation Around NFP

In the US, news about the disagreement between Trump and Musk briefly impacted sentiment during European trading hours. However, it resolved quickly with signs of improved communication between the two. This serves as a reminder that non-economic news can catch the market off-guard, especially involving prominent figures. Some reports indicated a potential Friday discussion involving aides and Musk, but others contradicted that nothing is confirmed. Now, all eyes are on the afternoon’s events. The US non-farm payrolls report is expected to be the main influence on price movement. Canada’s employment figures might also create short-term volatility in CAD-related pairs, especially with any unexpected results. These data points play a key role in interest rate projections and central bank decisions. Simultaneously, equity markets are trying to recover, with US indices and cryptocurrencies like bitcoin climbing as the American session begins. This rise could indicate traders adjusting their positions ahead of the data or speculative buying based on increased risk sentiment. Traders involved in rates or volatile assets should stay alert. This morning showed that even in quiet times, personal disputes or slight changes in communication can cause market fluctuations. Coupled with the anticipation of the NFP and the overall economic landscape, it emphasizes the importance of being flexible during the day. We have maintained a neutral stance until new data is released, reflecting the broader market action. Create your live VT Markets account and start trading now.

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