CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

What now after US jobs data? - FX, Equities, Commodities outlook

By Daniela Hathorn

14:06, 10 March 2023

“now hiring” sign posted on business door
“now hiring” sign posted on business door - source: getty images

Well, that is it. The data that everyone was waiting for is out, and it seems like this time we may have some further clarity as to what is happening. Or not. Who knows.

The US jobs data saw an unexpected uptick in unemployment in February to 3.6%, after a surprise drop to 53-year lows at 3.4% in January. In general, the data release was slightly underwhelming with wages also dropping below expectations, which aligns with the belief that the January data was an outlier. But it isn’t a home run for equity bulls and Fed dovish hopefuls as the non-farm payrolls still added more jobs than expected in the month, and whilst the January reading was revised lower, it was marginal and still shows more than 500k new jobs were created in the first month of the year.

The reaction in the market has been to go with lower wages and higher unemployment, giving a boost to treasuries and equities, and a drop to session lows for the US dollar. But unfortunately, I think once the dust settles, there will be uncertainty and a struggle for clear direction as Powell’s hawkish comments on Tuesday are likely lingering at the back of everyone’s mind.

I doubt the data released today is going to make the Federal Reserve reconsider its interest rate path, which seems to be getting stronger by the day if recent comments are anything to go by. We are 12 days away from the March FOMC meeting and I don’t rule out further consolidation in the markets as traders eagerly await the interest rate decision - which has been teased as a possible 50bps hike - and the ensuing comments from Powell. 

The FX space has seen some action this week which has been a nice change in momentum and one of the standout currencies has been the British Pound. GBP/USD has been pounding higher over the past three days despite an intense pullback on Tuesday on the back of Powell’s remarks to Congress. Initially, it looked like the pair had been sentenced to break out of its descending wedge and look for new yearly lows (which it did at 1.1802) but the reversal has been so strong that we may in fact be looking at a bullish breakaway from the recent pattern, with the pair needing to close above 1.2032 to consolidate the move higher. Again, we’ll have to see what happens once the dust settles and traders reassess their positions, but for now, the recovery seems to be holding up nicely heading into next week. The same can be said for GBP/JPY, which has had a helping hand from the BOJ delivering another meeting with an unchanged ultra-lose monetary policy. 

GBP/USD daily chart


0.66 Price
-0.100% 1D Chg, %
Long position overnight fee -0.0072%
Short position overnight fee -0.0011%
Overnight fee time 22:00 (UTC)
Spread 0.00006


0.66 Price
-0.100% 1D Chg, %
Long position overnight fee -0.0072%
Short position overnight fee -0.0011%
Overnight fee time 22:00 (UTC)
Spread 0.00006


146.16 Price
+0.860% 1D Chg, %
Long position overnight fee 0.0112%
Short position overnight fee -0.0194%
Overnight fee time 22:00 (UTC)
Spread 0.010


1.08 Price
+0.040% 1D Chg, %
Long position overnight fee -0.0080%
Short position overnight fee -0.0003%
Overnight fee time 22:00 (UTC)
Spread 0.00006
GBP/USD daily chartPhoto: Source: trading view

For equities, the uptick in unemployment and drop in wages has led to a pause in the bearish momentum which has taken over this past week. To be honest, both the S&P 500 and Nasdaq were looking over-extended after last Friday’s bounce and the move this week has realigned with the previous bearish path. Whilst the Nasdaq continues to hold above its 200-day SMA (11892) after finding support along it, the S&P 500 has closed below it for the first time since mid-January, a sign that the index might find it hard to break higher as resistance will likely arise along this line (3937). That said, the 2022 descending trend line is still in a position to offer support in the short term, with 3872 as the first point of contact. 

S&P 500 daily chart

S&P 500 daily chartPhoto: Source: trading view

USD-denominated commodities like WTI, XAU/USD and XAG/USD have also benefited from the drop in yields and the US dollar following the jobs data release. US crude has snapped three days of consecutive losses but the bullish momentum is very fragile, meaning that a change in direction is unlikely at this point and the path of least resistance continues to the downside. Gold continues to find support just above the 1800 line but is struggling to consolidate further upside to break higher as the short-term moving averages (20-day and 50-day) are offering some resistance up ahead after a bearish cross. Silver seems to have found some support at 19.90 as the RSI starts to pick up above the oversold territory but the 200-day SMA (20.91) is lying close up ahead and is likely to limit the momentum from buyers heading into next week. 

XAG/USD (Silver) daily chart

XAG/USD (Silver) daily chartPhoto: Source: trading view
The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 570.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading