Harmovest Capital | Daily Market Insight: Is the US labour market still driving risk-on sentiment?

07/05/2026 | Market Highlights

Key Takeaways

• US ADP employment data exceeded expectations, reflecting continued resilience in the labor market

• Market risk aversion continues to ease as risk appetite gradually returns

• The US dollar remains supported while US equity indices continue their upward trend

Market Recap

US ADP private payrolls increased by 109,000 in April, surpassing market expectations of 84,000 and showing a clear improvement from the previous reading. The data highlighted the resilience of the US labor market and further strengthened expectations that the Federal Reserve may keep interest rates unchanged for a longer period, while near-term rate cut expectations continue to fade.

At the same time, wage growth remained stable, with sectors such as education, healthcare, construction, and transportation continuing to support employment growth, indicating that the US economy remains on an expansionary path despite slower hiring momentum.

As employment data stayed firm and geopolitical concerns gradually eased, safe-haven demand weakened and capital began flowing back into risk assets. The US Dollar Index remained supported, US equities extended gains, while precious metals such as gold faced short-term pressure.

Today's Focus

• US Initial Jobless Claims

Markets will closely monitor tonights US jobless claims data to further assess the strength of the labor market. A stable reading could reinforce expectations that the Federal Reserve will maintain higher interest rates, impacting the US dollar, gold, and US equity markets.

Market Sentiment Analysis

The Fear & Greed Index has risen to 68, signaling a notable recovery in market risk appetite. As markets gradually digest geopolitical tensions surrounding Iran, safe-haven flows have started shifting back into risk assets, supporting continued rebounds in US equities and cryptocurrencies.

Overall, market sentiment is transitioning from a risk-off environment toward a more risk-on tone, which remains supportive for risk assets in the near term.

Technical Analysis | XAUUSD

Gold has recently entered a corrective phase as safe-haven demand continues to cool. From a technical perspective, gold prices have broken below a key support area, suggesting short-term bearish momentum may persist as the market continues testing lower support levels.

If the US dollar remains strong and market sentiment continues improving, gold could face additional downside pressure in the short term, with key attention focused around the 4650 region.