NONFARM PAYROLLS TO DRIVE MARKETS
US jobs data headline an active data wire on Friday, as markets brace for what’s arguably the most closely-watched economic release of the month.
The Department of Labor will issue its nonfarm payrolls report at 12:30 GMT. Most measures of labour market health are expected to be positive, with analysts forecasting the creation of 183,000 nonfarm jobs in July. That follows a brisk 222,000 addition the previous month.
The national unemployment rate is forecast to drop 0.1 percentage point to 4.3%.
On the earnings front, average hourly wages are expected to rise 2.4% in the 12 months through July. That follows a 2.5% year-over-year gain in June.
Traders will be watching for any deviation from the consensus forecasts, especially for the headline nonfarm payrolls number. The US dollar will be especially vulnerable. The currency fell to fresh 14-month lows against a basket of currencies earlier this week.
Separately, the Commerce Department will release the latest trade figures for the month of June. Washington’s trade deficit is projected to fall to $45 billion from $46.5 billion in May.
North of the border, Canada will also issue its latest employment and trade figures on Friday. Employment is forecast to rise by 10,000, following a gain of 45,300 the previous month that was much higher than forecasts. The unemployment rate is expected to hold steady at 6.5%.
Canada’s international merchandise trade deficit is expected to rise to $1.35 billion in June from $1.09 billion the month before.
Oil traders will also keep track of the latest US rig-count numbers courtesy of Baker Hughes Inc. The oilfield services provider will release its weekly report at 17:00 GMT.
The euro will look to nonfarm payrolls for direction on Friday, but could also see action after Germany’s Federal Statistical Department releases the latest factory orders report at 06:00 GMT. Factory orders are forecast to rise 0.5% in June and 4.4% annually. The EUR/USD edged up 0.1% to 1.1888 on Friday. Price broke above 1.1900 on Thursday. A close above 1.1870 should see the pair returning above the 1.1900 level.
The British pound retreated from yearly highs on Thursday, as the Bank of England (BOE) rate decision undermined the bulls. Cable was last seen trading in the mid-1.31 region. The GBP/USD lost around half a percent Thursday and faces immediate support at the 10-day simple moving average (1.3124). On the opposite side of the spectrum, immediate resistance is seen at 1.3266, the high from 3 August.
The USD/CAD spent the majority of Thursday’s session trading sideways, as markets braced for monthly jobs data. The technical outlook continues to favour the Canadian dollar. The USD/CAD faces immediate support at 1.2550, followed by the psychological 1.2500 level. On the other hand, immediate resistance will likely be met at 1.2650, the high from 19 July.