Markets poised for Nonfarm Payroll

3 November, 2017

The build up has begun for tomorrows NFP announcement and the market is betting big time on a strong result of 313K; this is a very large expectation, but it makes a lot of sense when you consider the seasonal impact that Christmas has on markets. Labour markets certainly boom during this period and even part time workers are considered part of the work force. I will say one thing, with such a large number it will be hard to beat, and I'm not certain that markets will take kindly to anything below the 313K, so it could be the NFP of the year on this basis. Markets will also be digesting the recent announcement that Powell will take over from Yellen as the FED chair. The markets thus far have been positive regarding this, with a number of heavy weight finance figures speaking out in favour of him. Many had expected a hawk, but the reality is that he's likely to take over from the Yellen framework and continue it in the short to medium term until he has a good grasp of the situation.

For the NFP traders, the metal markets is always the big calling when it comes to movements. Gold has thus far been creeping up on whatever USD weakness it can find, which is not surprising as the bulls are always there. Any NFP weakness tomorrow could see gold catapulted above the current resistance level at 1281 with the potential to even break through 1295 if it's quite bad. In the event it's a very strong result and in line with expectations then 1267 and 1247 are likely to be key levels of support for the gold market. All the moving averages at present are not likely to impact any shifts upwards or downwards so it will be a case of playing of key price levels that the market can digest at this present time.

It was also a big day for the British market as the Bank of England raised interest rates by 25 basis points, leaving the intraday banking rate at 0.5%. This move had been widely expected, but the comments afterwards helped drive the pound down and encourage the doves in the market as the Bank expected inflation to taper off (as the pound stabilised) and also Brexit would bring uncertainty to the market causing issues in the long run.  

The big benefactor of this was of course the FTSE 100 which lifted sharply on the news as the bulls rushed in to take advantage, and as the UK oil producers showed strong earnings as well. The market is now poised to have another crack at resistance at 7600 and NFP could be a catalyst which could push it through tomorrow as well. In the event that markets fall back down support at 7551 and 7436 is likely to be key levels, and markets will be looking to stop the rot if anything does transpi


Source link  
Has Great Bull Market reached its end?

On Wednesday, U.S. equity markets suffered their worst selloff since last February. Volatility spiked 44%, trading at levels last seen in March...

Euro rebounds on easing budget fears

Global trade developments, Brexit-related uncertainty, turmoil in Italy and rising commodity prices have certainly made the first few trading days of Q4 quite...

NAFTA deal revives risk-on sentiment

Investors have entered into the final trading quarter with a renewed appetite for risk after Canada agreed to join the United States and Mexico...


What to watch in Q4 2018?

Trumponomics, the Federal Reserve, Emerging markets turmoil, oil prices, and Brexit negotiations were the biggest drivers of financial markets throughout...

Greenback turns to Fed's dot plot

The most popular topic across financial market headlines is the relentless appreciation witnessed in global oil prices after OPEC and Russia squarely...

Dollar dips on NAFTA uncertainty

It was already shaping up to be a negative trading week for the Dollar as easing trade concerns dented the currency's safe-haven appeal...


Yuan to benefit from Xi comments

Global markets are attempting to power higher today as investors mostly brush away the latest escalation in tit-for-tat tariffs between the world's two...

The drums of a global trade war are beating

The drums of a global trade war are beating louder than ever after U.S. President Donald Trump imposed a 10% tariff on an additional 200...

BoE inflation report hearings in focus

A sense of gloom was evident across financial markets today as worries over rising trade tensions and emerging market weakness weighed heavily...

  


Share: