It has been a quiet day in the markets with subdued volumes and small changes: in America US30 ticked down 0.03% while both US500 & US100 lost around 0.1% and volumes have been 15% lower than the 30-day average. But European indices and other asset calls such as metals also showed a lot of indecision, drawing what in candlestick analysis is called a Doji. The situation was somewhat different for the USD and Oil, which fell, in the case of the latter strongly.
The market awaits the September NFP data today after the picture that has emerged so far this week from the labour data has been mixed: we had a strong JOLTS report while ADP payrolls disappointed; yesterday’s Claims varied very little leaving room for indecision. Investors are worried about the possibility of a very positive NFP which could put new pressure on bonds and equities: yesterday the 10Y weakened to 4.73% but there are some market watchers – including bond king Bill Gross and Jamie Dimon – who see the possibility of quite higher levels in the future. Anyway, back to NFP, the average expectations are for +170k new jobs created, down from +187k in August and estimates range from +145k to +240k with the big US banks (Citi, BOFA) skewed to the upside.
NFP Readings
A note on the various speeches the central bankers are giving these days: yesterday both NY Fed’s Davy and ECB’s Villeroy empathized that the current monetary levels are appropriate, and expectations are correctly pricing future 2023 moves (no more hikes). Finally, Oil keeps falling and that is good news: Russia is lifting its Diesel exports ban but Curve is still in backwardation.
- FX – USDIndex +0.17% @ 106.26; USDJPY < 149, EURUSD -0.11% @ 1.0542, Cable -0.15% @ 1.2174. The once mighty MXN peso is falling hard vs USD, this morning +0.20% and +7.49% from 20/09. USDZAR flat not far from 2023 highs 19.51.
- Stocks – Equity futures are slightly negative this morning, US500 -0.1%, Europe is mostly flat with FRA40 outperforming +0.05% at 7020.
- Commodities – USOil +0.05% at 82.58$ pauses its drop close to a mild support level.
- Metals – Gold flat @ $1820.78, XAGUSD -0.20 @ $20.92, Palladium -0.67% and Copper $3.56 are still weak and below their recent floors.
Today: highlights include German Industrial Orders, US NFP, Labor Force Participation and Unemployment rate, Canadian Employment, Fed’s Waller.
Interesting Mover: USDMXN is up 7.49% since 20/09 lows, shows higher highs and trades above 50-200 MAs. 18.40 – 18.55 is a mild resistance area, RSI14 marks 72.24
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Marco Turatti
Market Analyst
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