Markets around the world are displaying a cocktail of trepidation and anticipation as traders tread carefully ahead of the September Non-Farm Payroll (NFP) data. Here's a detailed overview of the current financial tableau. On the American front, trading volumes and indices shifts have been relatively somber. The US30 index inched downward by a marginal 0.03%. Concurrently, the US500 and US100 experienced slight downturns, each shedding around 0.1% of their value. Notably, trading volumes were observed to be around 15% below their 30-day average, suggesting a cautious market sentiment.
European Indices and Metals: An Ambiguous Picture
While US markets were tepid, European indices and certain asset classes like metals seemed trapped in a state of limbo. Technical analysts observed what's referred to as a 'Doji' in candlestick parlance – indicating market indecision. Both the US Dollar and Oil prices moved downward, with the decline in Oil being particularly pronounced.
The NFP Expectation Conundrum
The overarching sentiment is of a market holding its breath for the NFP data. Preceding labor data has painted a patchy picture. While the JOLTS report demonstrated strength, the ADP payroll figures couldn't meet expectations. Unemployment claims from yesterday held steady, adding to the prevailing uncertainty. A robust NFP outcome could trigger ripples in bonds and equities. For context, the 10-Year bond weakened to 4.73% recently, though market stalwarts like Bill Gross and Jamie Dimon anticipate steeper climbs. On the NFP front, the consensus is pegged at +170k new jobs, a slight dip from August's +187k, but predictions run the gamut from +145k to +240k. Significantly, banking giants like Citi and BOFA lean towards more optimistic projections.
Central Banker Insight
Recent statements from central banking personalities have added layers to the narrative. Both NY Fed's Davy and ECB's Villeroy underscored that present monetary stances are fitting, downplaying expectations of interest rate hikes in 2023.
Snapshot of Current Market Movements:
- Forex: USDIndex stands at +0.17% @ 106.26. Noteworthy shifts include the MXN peso's pronounced slide against the USD, down +0.20% today and tumbling +7.49% since 20th September. Other pair movements include USDJPY standing below 149, EURUSD at -0.11% pegged @ 1.0542, and Cable registering -0.15% positioned @ 1.2174.
- Equities: Equity futures were marginally negative, with US500 down by 0.1%. European indices mostly hovered near the baseline, except for FRA40 which saw a slight increase of +0.05% at 7020.
- Commodities: The spotlight remains on Oil, which, after a significant decline, now sees a minor uptick of +0.05% at $82.58.
- Metals: Gold steadies itself at $1820.78, while other metals like Silver (XAGUSD) at $20.92, Palladium, and Copper (priced at $3.56) remain subdued, trailing their recent benchmarks.
Upcoming Market Events
Eyes will be on forthcoming data like German Industrial Orders, the US NFP, Labor Force Participation and Unemployment rate metrics, Canadian Employment statistics, and insights from Fed’s Waller. Market Spotlight: The USDMXN pair is one to watch, having surged 7.49% since its lows on 20th September. Its current trajectory showcases ascending peaks, firmly positioned above the 50-200 Moving Averages. With an RSI14 standing at 72.24, the 18.40 – 18.55 range emerges as a tentative resistance zone.