FOREX
The US dollar lost ground to other major currencies during early Friday trading, ahead of the release of the August Non-Farm Payrolls later in the day. Today’s softness comes on the back of Thursday’s gains, which followed the release of stronger-than-expected personal spending numbers. These ups and downs of the currency illustrate well the uncertainty amongst analysts and traders, over how the Fed will proceed later this month when it meets to decide on monetary policy. Against this background, today’s NFPs will be closely watched as the employment data may become the tiebreaker when the FOMC meets again later in September. A positive number, which in this case would be more than 170,000 new jobs created in August, could tip the scales and convince the more dovish policymakers to agree with another rate hike. Conversely, a disappointing number would almost certainly settle the issue, erasing any chance of further tightening in the short term.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European shares are trading sideways on Friday, following a mixed trading session overnight in Asia, as the “wait and see” stance prevails on most markets.
Market sentiment remains muted in Europe, except for basic materials and energy shares, which have registered the best performance across the board, led higher by rising energy prices.
The STOXX-50 index slowly dances with its first support around 4,300.0pts, with no significant price action so far as most traders wait for another batch of key data from the US with the average hourly earnings, the ISM manufacturing employment, unemployment rate, and, of course, one of the biggest market movers: the Non-Farm Payroll.
Analysts worldwide already anticipate a decrease in job creation and earnings for August, which would come in line with the recent data suggesting the US Economy is slowly losing its steam.
However, while this sounds like bad news, there is a high chance poor macro data this afternoon could lift market sentiment towards risky assets, boosted by bets of a much less aggressive monetary stance from the Fed.
On the other hand, stronger-than-expected reports could seriously dent anticipations of an end to the current monetary tightening cycle, putting further pressure on stocks.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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