06 October 2017 at 7:24 GMT
- NFP expectations between + 75,000 and + 80,000 – Rawashdeh
- NFP to confirm US economy is growing steadily – Garnry
- We expect the biggest NFP action in EM equities
- IBEX bias is to upside, we could see further strengthening – Garnry
- USD rally extends, especially versus commodity currencies – Hardy
- GBPUSD crashed through pivot zone with other USD pairs – Hardy
- Rising yields and strong equity markets are holding JPY back – Hardy
By Clare MacCarthy
Markets are calm in the wake of a record-breaking Wall Street session and sentiment is rather upbeat ahead of the week's key event – today's US nonfarm payrolls report. Although this report is likely to reveal one of the weakest rates of job creation in the US this year, this is seen as a result of the recent spate of severe hurricanes rather than a reflection of any underlying weakness in the economy.
"NFP is likely to confirm that the US economy is growing steadily," says Peter Garnry, Saxo's head of equity strategy, adding that the biggest impact in terms of equities will likely be seen in emerging markets. Only a strong divergence from the expected addition of between 75,000 to 80,000 new jobs would cause major ripples,says John J Hardy, Saxo's head of forex strategy.
Among the major currencies as we lead in to the NFP data, the USD rally has extended, especially versus commodity currencies, while Cable has crashed through a pivot zone with other USD pairs, Hardy reports. This follows another round of political uncertainty in the UK after prime minister Theresa May's calamitous speech at the Tory party conference.
Finally, the Catalonian political crisis is still evolving but Spanish equities have nevertheless regained some equilibrium. "The IBEX bias is to the upside and we could see further strengthening," Garnry concludes.
US NFP expected to reveal continued steady economic growth. Photo: Shutterstock