By Sri Jegarajah
Benchmark oil prices are set to start the third-quarter on a positive note, reflecting expectations of better US data with ISM manufacturing and Friday’s closely-watched June jobs report amongst the highlights, though further evidence of a slowdown in China may limit gains, according to CNBC’s latest survey of oil market sentiment.
Oil bulls are banking on the Labor Department number to be consistent with the view of a continued gradual recovery in the world’s largest economy. However, with global investors still pre-occupied with the timing of Federal Reserve stimulus withdrawal, a payrolls beat by a wide margin may put risk assets under pressure as markets fear a blow-away number builds the case for a faster than anticipated wind-down by the Fed.
A Reuters’ poll of economists is forecasting a payrolls gain of 166,000 in June, a slower pace of job creation compared to May’s 175,000, while the unemployment rate is expected to dip to 7.5 percent.
The best outcome for financial and commodities markets this week would be “goldilocks” data from the US – not too strong to raise fears of an early stimulus roll-back while not too weak to suggest the recovery is losing steam, said Gaurav Sodhi, Resources Analyst at the Intelligent Investor in Sydney.
You can read the rest of this story on CNBC’s website.
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