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• US stocks traded flat to higher as traders analyzed the latest labor report, with the economy adding 209K jobs in June, below expectations.
• The unemployment rate fell back to 3.6%, indicating a tight labor market, while wage growth remained steady.
• Traders foresee a nearly 95% chance of a 25bps rate hike this month, signaling expectations of continued tightening by the Federal Reserve.
• Alibaba’s shares rose nearly 4% following reports of a potential fine on Ant Group by Chinese authorities.
• On a weekly basis, the Dow Jones declined by nearly 1.4%, the S&P 500 fell 0.9%, and the Nasdaq lost 0.8%.
• Next week, investors can anticipate the start of the earnings season and the release of the Consumer Price Index (CPI) for June, providing further insights into the US economy.
• The dollar index dropped below 103 as investors digested the labor data, which revealed a modest job growth of 209 thousand in June.
• Despite the lower job numbers, the jobless rate decreased slightly to 3.6%, indicating a resilient labor market.
• The recently released FOMC minutes for June signaled the Federal Reserve’s decision to maintain steady rates while leaving the possibility of rate hikes later in the year.

The E-mini S&P 500 Futures rallied by approximately 0.5% to reach 4468, following a mixed session driven by the labor data. In the upcoming period, the market is anticipated to establish a balanced price range, targeting the current swing lows to build core long positions. However, the short-term perspective suggests a potential selling pressure as the market approaches the prior upper balanced price range.

The dollar index weakened by around 0.8% and is currently trading around $102.30. This has provided support to the equities and commodities landscape, leading to a 0.9% increase in gold prices and a 2% rise in crude oil, reaching $73 per barrel. Median-term weaker dollar is also bullish for the stock market index for the moment.

The current negative volatility, standing at approximately 6%, may also contribute to market support. On the median-term perspective, there are indications of upcoming positive volatility, which could exert pressure on the market around the mentioned highs, particularly if confluence factors come into play during the upcoming week with the awaited CPI development. Meanwhile, long-term volatility remains bullish for the equities sector and the US stock market.

When examining the monthly volume profile of the ES Futures contract, we observe the filling of the previously mentioned low volume area, resulting in the current balanced price range on the daily interval.

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