The markets are waiting for the report on the labor market and benchmarks Brexit
Progress in the negotiations of the China-U.S.
New hope for easing trade wars a very positive impact on all markets. The Chinese side plans to fly to Washington in early October. However, up to this point can be published a whole series of trump’s tweets, and they can easily be contrary to positive expectations from the meeting.
In the morning Asian stocks are showing growth following yesterday’s strong us session. Index Asia Pacific MSCI increased the most since June, adding 0.4%. The offshore yuan slid 0.1% to 7.1478, whereas this instrument in the trading war is considered the most strong weapon against China duties.
The commodity market should also benefit from improving sentiment around the trade war. The demand in this area directly depends on the performance of major economies. Mark Brent crude oil slumped to its highest in a month at $62.40, due to declining stocks in U.S. vaults and easing trade tensions.
NFP: the market is suitable for publication data
Published on Thursday nonfarm payrolls report in the us ADP showed the highest growth over the last 4 months, at the level of 195K. This configures the global market on the positive and relative to today’s Nonfarm Payrolls – not only because this is a leading indicator, but also because it has influence even outside the States. On this news, the Dow rose yesterday by 1.4%, the S&P500 added 1.3% and the Nasdaq rose by 1.75%.
Now at 15:30 GMT will be known data on Changes in the number of jobs outside agricultural sector and unemployment rate in the United States. Rather, these indicators will trigger a surge of volatility in the markets.
According to forecasts, in August in the United States was created 160 thousand new jobs (Nonfarm Payrolls) after 164 thousand a month earlier. The unemployment rate is expected to remain unchanged at 3.7%. Investors fear that the weak will be further confirmation of the slowdown in the national economy.
Significant attention will be focused on the Average hourly wage. Analysts believe that the inflation data will show a slowdown to 3.0% yoy after 3.2% in July yoy.
Weak NFP (less than 110 thousand), paired with an unemployment rate of over 3.7%, presumably, will put pressure on the USD. A strong NFP print (above 210 thousand), with an unemployment rate of less than 3.7%, can strengthen the dollar. Also pay attention to the revision of the previous value of the non-farm Payrolls: it will affect the mood of the market, regardless of the actual values.
Pat for Brexit: the game is played?
Pound on Friday, hovering around a high of 6 weeks, at $1.2353. Investor sentiment improved, and the degree of unrest surrounding possible exit of Britain from the EU without a trade transaction have declined.
I must admit that in the UK we only see a stalemate around Brakcet. On the one hand, the results of the referendum clearly give policymakers a direction to work towards withdrawal from the EU. On the other hand, Brexit became a subject of political struggle, because all understand the actual consequences of this event. As a result, we have an exhausting tug of war for several years, while the result may well be a second referendum. Policy easy to understand, on the negative statistics, will show the consequences of even the prospect of exiting the European bloc, suggesting that the residents of the country, “think again.”
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