NY Open: Pre-payrolls positioning
FX Trader, Loonieviews.net
Summary: The dollar is erasing Wednesday's gains with equities following suit as traders position themselves for Friday's US nonfarm payrolls update.
Markets are positioning for tomorrow’s US nonfarm payrolls report. Traders seemed to be re-evaluating yesterday’s equity and US dollar rally and reversed most if not all of yesterday’s move, perhaps believing that they moved too far ahead of themselves.
Friday’s NFP report is forecast to show a gain of 185,000 jobs, a tad shy of August’s 201,000 print. The shortfall is easily explained by blaming Hurricane Florence. Rumours of a blow-out print have surfaced based on a well-known economist extrapolating data from yesterday’s ISM employment component and opining that it "implies" a huge gain. He clarified his remark by noting huge monthly discrepancies and said he wouldn’t rush to change his forecast.
The US dollar retreated steadily across the G-10 currency spectrum since New York opened, but all the moves are modest. GBPUSD has rallied the most, and it is only up 0.27% (as of 14:00 GMT). The dollar wobbled slightly on news that US factory orders rose 2.3% in August, well above the 0.8% drop in July and handily beating the 2.1% forecast. The better than expected data came on the heels of a strong Initial Jobless Claims report (207,000 versus a forecasted 213,000).
The US dollar retreat is also due to the USDX failing to crack above resistance in the 95.80-90 area.
Wall Street is under pressure and has erased all of yesterday’s gains in early trading today. The surge in US Treasury yields, particularly the 10-year yield which touched 3.22 yesterday, put global equity indices under pressure, and US markets are following suit. Wall Street traders may be spooked by a Bloomberg article accusing China of hacking hardware for US companies such as Apple (AAPL:xnas) and Amazon (AMZN: xnas) Both companies denied the claim. A break below minor support at 95.24 would suggest further losses to 94.60.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.