There wasn’t a lot of action during today’s morning London session, very likely because traders were keeping their heads down ahead of the NFP report.
Oddly enough, however, the Aussie managed to close higher against all its peers, despite the risk-off vibes and slide in gold prices.
- German industrial production m/m: -1.6% vs. 0.2% expected, 0.1% previous
- French budget balance: -€28.5B vs. -€10.8B previous
- French trade balane: -€5.2B vs. -€5.3B expected, -€5.4B previous
- Swiss foreign currency reserves: CHF 738B vs. CHF 732B previous
- Euro Zone retail PMI: 50.1 vs. 52.3 previous
- NFP report coming up
- Canada’s jobs report also coming up
- Fed Chair Powell and BOE Guv’nah Carney will speak later
Today is another U.S. non-farm payrolls (NFP) Friday! And as usual, volatility and directional movement were both in short supply as traders hunkered down ahead of the NFP report.
By the way, if you’re planning to trade the NFP report, then you may wanna check out Forex Gump’s Event Preview for the upcoming NFP report.
And just so you know, Canada will be releasing its jobs report as well. So while you’re at it, you may also wanna check out Forex Gump’s Event Preview for Canada’s jobs report.
ECB’s Coeure speaks
ECB Executive Board Member Benoit Coeure was interviewed by CNBC earlier, and Coeure mainly talked about the trade spat between the U.S. and China, warning that:
“If this would move into a full-fledged trade war, this has a potential to have quite damaging consequences for growth and jobs, globally, including in the U.S.”
“The first is the effects higher tariffs would have on growth and inflation in the near to medium term … The second main implication is the possible impact on long-run potential output growth, and how that may influence the conduct of monetary policy.”
Coeure also mentioned that trade tensions weren’t really considered in the ECB’s recent deliberations, adding that the trade spat between China and the U.S. is currently the ECB’s “biggest” concern.
Other than that, Coeure also repeated the ECB’s overall cautious message that:
“There is very broad agreement in the Governing Council of the ECB that the high degree of accommodation will remain needed, and that (is) irrespective of a trade war.”
Risk aversion returns ahead of NFP
The major European equity indices were broadly lower for the day, which implies that risk aversion was the prevailing risk sentiment in Europe.
And aside from the usual skittishness ahead of the NFP report, market analysts also blamed the risk-off vibes on renewed fears of a trade war between the U.S. and China after Trump revealed yesterday that he wanted to impose $100 billion worth of additional tariffs against China.
- The pan-European FTSEurofirst 300 was down by 0.50% to 1,467.68
- Germany’s DAX was down by 0.74% to 12,213.97
- The blue-chip Euro Stoxx 50 was down by 0.85% to 3,404.25
U.S. equity futures were also in pain, reinforcing the idea that risk aversion was the dominant sentiment, as well as hinting that the risk-off vibes may continue into the U.S. session. Although that may change since the NFPn report is coming up.
- S&P 500 futures were down by 1.01% to 2,634.75
- Nasdaq futures were down by 1.20% to 6,521.00
Major Market Mover(s):
As mentioned earlier, directional movement was in short supply during the session. However, the Aussie is worth highlighting since it closed the session on a high note, despite the risk-off vibes and the slide in gold prices. There’s no clear reason for the Aussie’s rise, however.
AUD/USD was up by 8 pips (+0.11%) to 0.7677, AUD/CHF was up by 13 pips (+0.17%) to 0.7400, AUD/CAD was up by 8 pips (+0.09%) to 0.9814
Watch Out For:
- 12:30 pm GMT: U.S. non-farm payrolls (+190K expected, +313K previous), jobless rate (4.0% expected, 4.1% previous), and average hourly earnings (0.3% expected, 0.1% previous)
- 12:30 pm GMT: Canadian net employment change (+4.1K expected, +15.4K previous), jobless rate (steady at 5.8% expected), and labor force participation rate (steady at 65.5% expected)
- 2:00 pm GMT: Ivey’s Canadian PMI (60.2 vs. 59.6 previous)
- 3:15 pm GMT: BOE Guv’nah Mark Carney will speak
- 5:30 pm GMT: Fed Chair Jerome Powell is scheduled to speak
- 7:00 pm GMT: U.S. consumer credit ($15.3B vs. $13.9B previous)