Quiet Day with US Markets Closed
It was a relatively quiet trading day yesterday with US markets closed and major risk events all behaving themselves, most financial products remained in tight ranges. Global stocks continued to perform well after Wednesday’s weaker US data prints and the UK election looks like coming in with the predicted Labour party landslide victory. Both the pound and the Yen traded in quiet ranges in light of the election result and a generally lower dollar whilst Oil edged higher, Brent adding 0.2% to trade up to $87.55 and WTI climbing 0.21% to close at $84.06 a barrel. Gold held on to its recent gains and is trading at $2,358 on the Asian open.
US Non-Farms in Focus for Dollar Traders Today
It has been a strange week for traders this week with the July 4th US holiday crammed in the middle of the week’s trading sessions. FX traders will be on their toes once the New York market opens with the Non-Farms likely to inject some volatility into what have been relatively tight rangebound pairs for the last few sessions. We have seen a similar pattern in FX with regard to the data preceding last month’s US jobs numbers with the dollar on the back foot for most of the week as US numbers have come in slightly weaker. Last month we saw the Dxy drop from 104.60 to 104.00 in the days ahead of the NFP’s before a surprise higher print sent it swiftly up to 104.95 on the day and led to a rally above 106 in the following weeks. Traders are conscious that we could see a similar reaction if the headline data prints significantly above the expected 191k monthly increase.
US Employment Data to Move Markets Later Today
It is set to be a quiet start to the trading day in Asia today with markets having traded in tight ranges for the last few sessions and little out on the event calendar to inspire more volatility. The European session also just has lower tier data releases scheduled and the UK elections look to have passed with little off expectation. However, things are likely to change swiftly on the New York open as traders return after their July 4th holiday and tackle the key US employment numbers. The headline Non-Farms Employment Change is predicted to come in around the +191k level with Average Hourly Earnings at +0.3% and the Unemployment Rate remaining steady at 4%.
