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September 2017

Markets await US data this afternoon

Published: Friday 01 September 2017

  • Markets await US data this afternoon
  • Euro suffers a steep sell-off yesterday
  • Sterling to maintain any meaningful rallies  
By Killian Greenwood
The US Dollar lost some momentum after yesterday's sharp rebound, as markets await US Non-Farm payrolls later this afternoon. It’s expected to show 180k new jobs created in August, while the unemployment rate is expected to be unchanged at 4.3%. Wage growth is also a key to watch as average hourly earnings are expected to rise 0.2% month on month.
The main question for all market participants is whether the Federal Reserve will hike rates again this year. Federal fund futures are only pricing in 36.9% chance of another hike in December. Stronger than expected Non-Farm payrolls numbers might lift the pricing a little but Fed policy makers would still need to see evidence that inflation is back on track before making another move.
The Euro suffered a steep sell-off yesterday on report that some "unnamed" European Central Bank (ECB) officials are concerned with its strength. The ECB might opt to "muddle" through the September meeting instead of announcing some solid tapering plan. Recent strength may be due to the weakness of other currencies. For instance, US dollar's weakness was broad based, as US inflation has been subdued.
UK Prime Minister Theresa May and International Trade Secretary Liam Fox are still on a trip in Japan that focuses on post Brexit trade between the countries. Fox hit back at EU chief negotiator Michel Barnier, who said that UK is being mired in "nostalgia" rather than taking a realistic approach in the Brexit negotiation. Fox said that, "We can't be blackmailed into paying a price on the first part. And, we think we should begin discussions on the final settlement because that's good for business, and it's good for the prosperity both the British people and of the rest of the people of the European Union."
Barnier said after concluding the third round of Brexit negotiations that the UK proposals showed, "A sort of nostalgia in the form of specific requests which would amount to continuing to enjoy the benefits of the single market and EU membership without actually being part of it." It’s clear that both sides are still very far apart and the Pound will struggle to maintain any meaningful rallies in the current environment.
A balanced diet means a cupcake in each hand.
My phone is acting up. I keep pressing the home button but when I look around, I’m still at work.
To the guy who created imaginary numbers in Maths, I hate you. 

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR 09:00 EU: Final Manufacturing Purchasing Managers' Index 57.4 57.4
GBP 09:30 UK: Manufacturing Purchasing Managers' Index 55.1 55.0
USD 13:30 US: Average Hourly Earnings 0.3% 0.2%
USD 13:30 US: Non-Farm Employment Change 209k 180k
USD 13:30 US: Unemployment Rate 4.3% 4.3%
CAD 14:30 Canada: Manufacturing Purchasing Managers' Index 55.5 55.5
USD 14:45 US: Final Manufacturing Purchasing Managers' Index 52.5 52.5
USD 15:00 US: ISM Manufacturing Purchasing Managers' Index 56.3 56.5
USD 15:00 US: Revised UoM Consumer Sentiment 97.6 97.4

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news