Article / 02 September 2016 at 11:25 GMT

Mid-session Europe: Markets poised for NFP cue

Saxo Markets


Foreign exchange
Expectations are for a 180,000 August nonfarm payrolls and an in line or consensus beat could reignite dollar after the early-week rally hit an ISM-led roadblock Thursday. If the NFP is positive, then expect speculation on the prospects for the US Federal Reserve to make a rate move in September to mount again.


  • US Aug Change in nonfarm payrolls (180K exp.)                     (1230 GMT)

  • US Aug Unemployment rate (4.8% exp.)                                       (1230 GMT)

  • US Aug Average Hourly Earnings (0.2% exp.)                               (1230 GMT)

  • US July Trade Balance                                                                   (1230 GMT)

  • US July Factory Orders (+2.0% exp.)                                             (1400 GMT)

  • US July Final Durable Goods Orders (4.4%)                                  (1400 GMT)
Forex developments

EURUSD USD was hit yesterday by a poor ISM Manufacturing figure for August, and is now awaiting the nonfarm payrolls where expectations are for a 180,000 reading. EURUSD is stuck between the 100-day moving average that it challenged Thursday and today at 1.1212 and the decent tech support of the 200-day moving average at 1.1123 today. We go into a three day weekend and on our weekly charts, EURUSD has had difficulty since August 2014 closing above the 100-week moving average which is at 1.1278 area for this week, so another interesting tech level. NFP has positively surprised twice in a row, and a third time is possible but statistically not frequent. So a strong upside surprise is possibly needed for stronger USD and going into sub-1.11 (55-week moving average at 1.1111 area). Preferring the downside, but a negative US data surprise could mean another bout of limbo in the higher zone. 

FX Options volatilities
NFP: Vols are trading at relative low levels considering the fact that we have NFP later today. The only major pair which is holding up nicely is USDJPY. Positioning in USD up to the event should still be relatively high despite the selloff yesterday, which likely puts the bar high for the NFP number. 
XAUUSD: Spot has so far been well supported around the $1,310-00/oz level, and risk reversals starts to move more towards XAUUSD Calls. $1,290/oz should be last support, then $1,250/oz.

Fixed income




Stocks across Europe were higher in choppy trading. Traders were waiting for the monthly US jobs report as they assess the chances for a US interest rate rise in September. Dax was up 0.2% at 10,553 and the CAC index was up 0.7% to 4,469. The FTSE 100 picked up 0.6% at 6,787.

Among the big movers Friday, Accor rose 3.5% after Barclays raised its rating on the French hotel company to overweight from equal weight. Barclays said weaker revenue per available room figures have been priced in. 

SBM Offshore tumbled nearly 13%. The Dutch oil-services provider said prosecutors in Brazil have rejected a leniency agreement it reached with Brazilian authorities. The agreement is connected to a bribery investigation involving state-run oil producer Petroleo Brasileiro, known as Petrobras. 

Rocket Internet SE dropped 8.8% after the German startup’s consolidated first-half loss widened, dashing expectations for a near-term swing to profit. 

US Futures traded slightly up +0.1% 2 hours before the NFP data release.  

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— Edited by Martin O'Rourke

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