05.01 - The NFP report is coming, USD moves higher
This Friday is all about the U.S. NFP report which is due at 13:30 GMT. Ahead of the report, the USD moved a bit higher, but everything could change as soon as the data will be released. Meanwhile, global stocks continue to trade near all-time highs. Elsewhere, Oil prices took a plunge after investors took profit. Here’s all you need to know for today’s trading.
The U.S. Labor Department will release its December nonfarm payrolls (NFP) report at 13:30 GMT on Friday.
The consensus forecast is that the data will show jobs growth of 190,000, following an increase of 228,000 in November; the unemployment rate is expected to remain unchanged at 4.1%, while average hourly earnings are expected to rise 0.3% after an increase of 0.2% a month earlier.
ADP’s monthly employment report, released a day earlier, showed the creation of 250,000 jobs in December which may have shifted market expectations for NFP to the upside.
An upbeat employment report would underline the case for higher interest rates in the coming months.
The dollar recovered some lost territory against major rivals on Friday, heading back towards the unchanged mark for the week after ending December at 91.83, as traders prepared for a battery of economic data.
Apart from the employment report, traders will focus on the ISM non-manufacturing purchasing managers’ index (PMI), durable goods orders and factory orders which will all be released at 15:00 GMT.
At 10:49 GMT, the U.S. dollar index gained 0.19% at 91.77.
Global stocks continued their bullish trend on Friday while waiting for the U.S. employment report.
After the Dow closed above 25,000 points with all three major U.S. stock benchmarks at record highs, U.S. futures to a continuation of the bullish trend.
Elsewhere, European stocks also continued to rally on Friday, racking up weekly gains of around 2.5%.
Earlier, Asian equities shared in the positive view on global stocks with Japan’s Nikkei 225 ending 0.9% higher and China’s Shanghai Composite closing with gains of 0.2%.
Oil prices pulled back from highs not seen since May 2015 as traders opted to take profits Friday on the back of a 10% from December lows.
U.S. crude oil futures fell 0.90% to $61.45 at 10:52 GMT), while Brent oil traded down 0.84% to $67.50.
Despite Friday’s losses, the U.S. benchmark was still up around 1.7% in the first week of 2018.
As market participants focus on the year ahead, they will weigh the production cut agreed between the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers led by Russia against increasing output from shale producers in the U.S. to judge the overall impact on global supply.
In that light, trades will watch the American side of the equation when Baker Hughes releases its most recent weekly rig count data to gauge active oil drillers in the U.S.
- by Roger Gain