Non-Farms in focus
|There’s a slight upside bias to European indices as we approach the open. This follows on from another positive close across Wall Street and a fresh record finish for the NASDAQ.
Investors are looking ahead to this afternoon’s US Non-Farm Payroll release for August. The consensus expectation is for job gains of 180,000 which would be a touch down on the 209,000 created in July but still keep the 6-month rolling average above 180,000. This is considered healthy in the current environment.
The Unemployment Rate is expected to hold steady at 4.3% - back at lows last seen over 16 years ago, and before then back in the late sixties. This low rate of unemployment has led some FOMC members to worry that inflation could suddenly surge higher. Certainly the employment picture has been improving across the Euro zone, Japan and UK, where central banks have kept monetary policy loose. This is why investors will also keep a close eye on today’s Average Hourly Earnings release as any pick-up in wage growth should encourage the hawks within the Fed. But yesterday’s Core PCE number (the Fed’s preferred inflation measure) has given the doves the upper hand. This fell to +1.4% in July from +1.5% previously and well below the Fed’s 2% target. It also continues the downward trend that began in January. Janet Yellen has made it clear that the Fed is keeping a close eye on inflation and there’s little chance of the central bank raising rates further this year unless Core PCE picks up sharply.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.