|

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.

Snap Shot
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 97.20.04
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 173000156000USD/12:30
CA Oct Net Change in Employment -1500067200CAD/12:30
CA Oct Full Time Employment Change - 23CAD/12:30
US Oct Two-Month Payroll Net Revision - -7000USD/12:30
US Oct Change in Private Payrolls 170000167000USD/12:30
CA Oct Part Time Employment Change - 44,1 CAD/12:30
US Oct Change in Manufact. Payrolls -4000-13000USD/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 - 354USD/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 5658,4 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

Author

Peter A Rosenstreich

Peter A Rosenstreich

Swissquote Bank Ltd

Peter Rosenstreich is Swissquote Bank’s Head of Market Strategy and manages the global strategy desk; he has held various positions in several banking institutions in the United States, Europe & Asia.

More from Peter A Rosenstreich
Share:

Editor's Picks

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.