Equity markets have continued to slow down in recent times, as the hype surrounding a proposed Fed rate cut appears to now be dying down.

The SPX finished marginally lower on the session after the banking sector, in particular, started to weaken with the prospect of lower interest rates. It is important to remember that lower rates are essentially a short-term sugar hit for the market. Equities need strong economic conditions to grow and usually, high-interest rates are correlated to high equity values for that reason.

WTI was the big faller on Wednesday on the back of a surprise build in oil inventories. Crude stockpiles rose for the second straight week, climbing 2.2 million barrels after analysts had predicted a decrease of 481,000 barrels.

That sent oil tumbling with oil stocks in particular down more than 3% on the session.

Asian Market Outlook

It is a big day ahead for the AUD/USD as we get the monthly employment report. The expectation is for 16K new jobs to have been created last month and a fall in the unemployment rate to 5.1% from 5.2%.

This is a pretty big report in the context of what has been going on with the RBA. The RBA is looking to cut rates again this year and strong employment as been a key metric for them.

Should we see a decent fall in the unemployment rate to perhaps 5.0%, that could well be a negative signal to markets, who are firmly pricing in a further cut this year.