06, January 2017

US Labor market data in the focus, Non-Farm will setup US dollar sentiment

America

Yesterday US stock markets closed mixed, amid large bunch of data on US labor market, negative outlook for the retail sector for 2017 and strong business activity index in the non-manufacturing and services sectors.

The retail sector has attracted attention after the Macy's company late on Wednesday announced plans to close 68 stores and to fire 10,000 employees in 2017. Macy's stock fell 14%. This week, on Wednesday, Deutsche Bank analysts have lowered forecasts for the profit of the European retail sector, European retailers also came under heavy selling this week.

US labor market remains in the worldwide spotlight - weak data on new jobs in the private non-farm payrolls from ADP raised concerns, despite lower than expected number of initial claims for unemployment benefits in the first week of January. ADP preliminary data show that today's Non-Farm may disappoint the markets. In this case, we will see the new wave of US currency sales.

Despite the fact that investors remain confident in the policy of the new president, Donald Trump and his ability to accelerate economic growth, there are fears that the markets are technically overheated, and further growth looks problematic without correction. Today, the focus is on Non-Farm and US unemployment rate.

Europe

Most European stock markets traded in the red today, after weak economic data publication in Germany, Europe's largest economy.

In addition, investors remain cautious, awaiting US official labor market data, which may suggest further steps by Federal Reserve to raise interest rates this year. The disappointing report on the labor market could lead to a change in plans to raise rates three times in 2017.

Asia

Earlier, most Asian markets closed in the red, amid the correction of the US dollar and Asian national currencies gains.

Oil

Oil prices have not added optimism today, Brent is trading below this year highs, in spite of the US EIA released weekly inventory data that showed a decrease of -7.051 million barrels. There is a report that Saudi Arabia cut production to meet OPEC+ agreement. Today, Brent crude oil futures are trying to gain a foothold on the highs in 2016, the level of $ 57 per barrel. However, it is obvious that the players are waiting for data on the US labor market and the corresponding reaction of the US dollar, not taking active steps before Non-Farm.

Forex

In the FOREX currency market during the Asian session, the US dollar traded mixed. There were attempts to start US dollar correction, but they did not look convincing. Trading activity is significantly below average – as influential set of data is ahead.