Nervous markets waits on NFP

Market Brief

Risk appetite has stabilized yet remains soft in light of growing uncertainty around the US election and Brexit. In addition, news flow from Turkey that opposition lawmakers have been detained is generating unwarranted nervousness. Asian regional equity indices were lower with the Nikkei down -1.34%, Shanghai Composite -0.12% while the Hang Seng is flat. In FX, USD is stronger against G10 and EM currencies, reversing the recent sell-off. While the political risk has increased with national polls narrowing, Clinton continues to have the lead. CNN polls indicate that Clinton has a 46% to 45% lead of Trump. Our predictive market analysis indicates that the spread is narrower and forecasting further tightening in the polls ahead (See Swissquote’s US Election Analysis page). Heading into the last weekend before America heads to the polls, anything can happen. 

Oil futures fell to a six-week low as speculation that OPEC will be unable to limit production with a member agreement intensified. In Australia, retail sales came in at 0.6& m/m above expectations for 0.4% and the prior month's read of 0.4%. In Japan, new data indicates that the service sectors expanded in October with a PMI read of 50.5 from 48.2 in September. Output rose in individual firms supported by a surge in new orders. 

Finally, Brexit took an unexpected turn as the court ruled that the UK parliament has the right to vote on Article 50. The government will appeal the high courts verdict and a Supreme Court hearing is scheduled for 5-8 December. Should the concept of the referendum provide the government with special power, the likelihood of an “ultra-soft Brexit” (i.e non-existent Brexit) increases significantly. We continue to see long GBP opportunities in short term sell-offs.

 

Global Indexes	Current Level	% Change
Nikkei 225 Index	16905.36	-1.33
Hang Seng Index	22642.62	-0.18
Shanghai Index	3125.32	-0.11
FTSE 100 Index	6717.78	-1.07
DAX Index	10250.24	-0.73
SMI Index	7607.25	-0.44
S&P 500 Index	2083.2	-0.09

 

Global Indexes	Current Level	% Change
Gold	1300.99	-0.13
Silver	18.35	-0.57
VIX	21.96	-0.54
Crude wti	44.65	-0.22
USD Index	97.2	0.04

 

Today's Calendar	Estimates	Previous	Country/GMT
EC Oct F Markit Eurozone Services PMI	53,5	53,5	EUR/09:00
EC Oct F Markit Eurozone Composite PMI	53,7	53,7	EUR/09:00
EC Sep PPI MoM	0,00%	-0,20%	EUR/10:00
EC Sep PPI YoY	-1,70%	-2,10%	EUR/10:00
US Sep Trade Balance	-3,80E+10	-4,07E+10	USD/12:30
CA Sep Int'l Merchandise Trade	-1,70E+09	-1,94E+09	CAD/12:30
CA Oct Unemployment Rate	7,00%	7,00%	CAD/12:30
US Oct Change in Nonfarm Payrolls	173000	156000	USD/12:30
CA Oct Net Change in Employment	-15000	67200	CAD/12:30
CA Oct Full Time Employment Change	-	23	CAD/12:30
US Oct Two-Month Payroll Net Revision	-	-7000	USD/12:30
US Oct Change in Private Payrolls	170000	167000	USD/12:30
CA Oct Part Time Employment Change	-	44,1	CAD/12:30
US Oct Change in Manufact. Payrolls	-4000	-13000	USD/12:30
CA Oct Participation Rate	65,7	65,7	CAD/12:30
US Oct Unemployment Rate	4,90%	5,00%	USD/12:30
US Oct Average Hourly Earnings MoM	0,30%	0,20%	USD/12:30
US Oct Average Hourly Earnings YoY	2,60%	2,60%	USD/12:30
US Oct Average Weekly Hours All Employees	34,4	34,4	USD/12:30
US Oct Change in Household Employment	-	354	USD/12:30
US Oct Labor Force Participation Rate	-	62,90%	USD/12:30
US Oct Underemployment Rate	-	9,70%	USD/12:30
CA Oct Ivey Purchasing Managers Index SA	56	58,4	CAD/14:00

 

Currency Tech

EUR/USD
R 2: 1.1352
R 1: 1.1210
CURRENT: 1.1096
S 1: 1.0822
S 2: 1.0711

GBPUSD
R 2: 1.2857
R 1: 1.2477
CURRENT: 1.2267
S 1: 1.2083
S 2: 1.1841

USDJPY
R 2: 111.45
R 1: 107.49
CURRENT: 103.56
S 1: 102.80
S 2: 100.09

USDCHF
R 2: 1.0093
R 1: 0.9999
CURRENT: 0.9707
S 1: 0.9843
S 2: 0.9632

• S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot