From the Floor: Dollar in focus ahead of December NFP — #SaxoStrats#SaxoStrats
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Source: Saxo Bank
The key factor for the dollar today is of course the December nonfarm payrolls release at 1330 GMT, with Hardy reporting that average hourly earnings are the key metric to watch.
"The nonfarm payroll headline figure doesn't really matter at all. What's really important is the average hourly earnings," says Hardy, explaining that since this week's very strong ADP payroll figures failed to rouse the dollar from its slumber that it would take a significant beat on the NFP headline today to shift the needle much.
Peter Garnry, Saxo's head of equity strategy, said he "wouldn't be surprised at all" to see a beat in the headline figure, on the basis of the really strong ADP payroll growth of +250,000. "The way the ADP is modelled, they try to be as close as possible to the NFP."
In stocks, the risk-on move continues apace with Garnry pointing to a further 1.3% gain for the Nikkei overnight. One sectoral shortfall to keep an eye on is in the cannabis industry, where shares declined 24% yesterday on US Attorney general Jeff Sessions rescinding an Obama-era policy limiting federal involvement in state-level cannabis policy; nevertheless, Garnry notes, the industry remains up 200% since October.
Garnry also points to strong outperformance in the automotive industry with Saxo's Equity Radar favouring Peugeot, Renault, Ferrari, Geely, and Magna as names to watch.
Today's data calendar sees Eurozone inflation estimates and PPI out this morning with a US ISM non-manufacturing release following the nonfarm payrolls print at 1500 GMT. According to Garnry, markets expect this reading to stay on its upward trend and lift to 57.6 for December from November's 57.4 reading.
In Europe, Garnry notes that traders will closely watch the Eurozone inflation figures for December as "inflation remains the biggest puzzle in markets today".
last month on Saxo's Equity Radar. Photo: Shutterstock