The 10-year US Treasury bond yield maintained its position above 4.6% this week, despite new data on jobless claims suggesting economic uncertainties. Initial Jobless Claims increased to 223,000, surpassing consensus expectations and rising from the previous week's 217,000. Meanwhile, Continuing Jobless Claims experienced an upswing of 46,000, reaching 1.899 million for the week ending January 11. The seasonally adjusted insured unemployment rate held steady at 1.2%. These developments highlighted ongoing challenges in the US labor market.
In financial markets, the US Dollar Index (DXY) hovered around 107.80, reflecting inconclusive price actions. Despite the rise in jobless claims, the Greenback's gains remained limited, affected by the weak data. The Federal Reserve has signaled the need for evidence of economic weakness and more subdued inflation to consider further policy loosening. This cautious approach from the Fed has contributed to the measured movements in currency and bond markets.
Gold prices experienced a decline on Thursday as the precious metal extended its correction from a multi-month high above $2,760 set on Wednesday, trading below $2,740. The lack of traction in XAU/USD coincided with US data that failed to provide a clear direction for investors. The falling demand for safe-haven assets like gold reflected a cautious market stance amid fluctuating economic indicators.
In currency markets, GBP/USD traded above 1.2300 during the latter half of Thursday, yet failed to gather bullish momentum. The pair's stability was attributed to the lack of US Dollar demand, which helped it maintain its footing. However, the cautious market environment prevented any significant upward movement.
The four-week moving average of Initial Jobless Claims saw a modest increase to 213,500, up by 750 from the previous week's unrevised average. These figures indicate a gradual softening in the labor market, raising questions about future economic trends and influencing investor sentiment.