Quiet Trading Day with US Holiday Affecting Markets
As anticipated, it was a relatively quiet day for financial markets yesterday as traders took advantage of a very light macroeconomic calendar combined with US and Canadian holidays to reassess recent moves. With both the equity and treasury markets closed in the US, the final session of the day was lacklustre. However, commodities and FX still experienced some volatility. The main moves came in the oil markets. Although there were concerns that gapping might occur in the morning due to increased tensions in the Middle East, these fears did not materialise. Nonetheless, oil prices did rise later in the day as news emerged that Libyan exports remain halted, with Brent crude up 0.8% to $77.52 and WTI up 0.7% to $74.04 a barrel. Currencies traded within recent ranges, with the dollar slipping slightly, and gold hovered around the $2,500 level.
US Employment Numbers in Focus This Week
US jobs numbers will be in focus this week, with investors and the Fed keen to assess the state of the labour market ahead of the next rate decision. There are four separate jobs updates scheduled over the next few days, culminating in the Non-Farm Payrolls update on Friday, which will undoubtedly have the most significant impact. The JOLTS Job Openings, ADP Non-Farm Employment Change, and weekly unemployment claims will all influence market sentiment. However, the trifecta of Non-Farm Employment Change, Average Hourly Earnings, and the Unemployment Rate on Friday will likely be the deciding factor. Last month’s surprise downside print, coupled with revisions of earlier data, has helped lock in expectations for a rate cut at the upcoming meeting. Consequently, any deviation from the anticipated +164k result could lead to significant volatility in the final trading session of the week.
Trading Calendar Kicks In for Traders Today
It was a very quiet start to the trading week yesterday, but the macroeconomic calendar begins to build up today, and investors are expecting increased volatility. The Asian session is devoid of any significant updates today, but once Europe opens, we anticipate a pick-up in market activity. The early European session will focus on the Swiss economy, with both CPI and GDP data due out, which should keep franc traders attentive as they anticipate the next move from the SNB. US markets will resume activity today following yesterday’s bank holiday, with the first of several tier-one data releases scheduled early in the day. The ISM Manufacturing PMI data is expected alongside the ISM Manufacturing Prices number, with the headline PMI forecasted at 47.5.
