- US Unemployment Claims rise to a 3-week high and read 9,000 higher than analysts’ expectations.
- The European Central Bank cuts interest rates for the first time in the current cycle.
- Christine Lagarde’s press conference says the cut was a hawkish rate cut meaning the ECB will not cut again unless data indicates a cut is necessary.
- NVIDIA will perform a stock split after the market closes, and the new stock price is expected to be around $121.
USA100
The NASDAQ’s volatility remained limited largely due to strong gains in the last few days and the upcoming NFP data this afternoon. So far this week, the index is trading 3.00% higher and at an all-time high. However, today’s volatility will largely depend on the US employment data.
Ideally investors will want to see data come in line with expectations in order to signal pressure on the Fed, but not on the economy. Analysts expect the Non-Farm Payroll to read 181,500 and the Unemployment Rate to remain at 3.9%. Though investors would prefer to see the Average Hourly Earnings read lower as this applies less upward pressure on inflation. Analysts expect the Average Hourly Earnings to come in at 0.3%, but a lower reading would be positive for stocks. If data reads slightly worse than expectations, the data can still support the stock market. However, if the employment data improves and beats expectations, indices can potentially retrace downwards.
Technical analysts advise the price is obtaining largely buy signals due to recent momentum. In addition to this, if the employment data does trigger a retracement, this could prompt investors to purchase at a lower price for the longer term. Therefore, retracements can also trigger corrections.
EURUSD
The latest price driver for the EURUSD exchange rate is the latest press conference from the European Central Bank. Currently, the Euro index is trading lower during this morning’s Asian session, but the US Dollar isn’t witnessing any major price increases either. The price of the exchange rate is trading above the 100-bar SMA and above the 75-Bar EMA indicating buyers are controlling the exchange rate. However, buy signals are not likely to materialize unless the price rises above 1.08961 and 1.08976.
Investors are focused on the results of the meeting of the ECB, at which the regulator reduced the key interest rate from 4.50% to 4.25%, the margin rate from 4.75% to 4.50%, and the deposit rate from 4.00% to 3.75%. Experts believe the ECB will continue to ease policy throughout the year. It is unclear when the next cut will occur due continued high consumer prices and significant wage growth.
Michalis Efthymiou
Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
