Good morning,
USD: Narrow Trading
Being the first Friday of the month means at 13:30 GMT we will have the US non-farm pay numbers. Analysts are looking for a continuation in and around the 190k – 200k mark which will finish off what has been a strong year for the US jobs market [324k being the biggest month in February]. The main benefactors of this growth have been healthcare, manufacturing, construction, transportation and warehousing, all essential for an expanding economy. As always, the market won’t put too much short-term emphasis on a miss and will normally correct back higher or lower as the markets wind down on Friday evening.
There was a strong bounce in risk sentiment as the NASDAQ recovered losses to finish in the green whilst the S&P only took on a 0.15% loss after spending most of the day getting bashed about by investors. There was more emphasis than normal on the Fed’s comments last night as we try and get a handle on this unfamiliar dovish approach for 2019 monetary policy. Any [less] soft comments are likely to be bullish for the dollar.
A stop-gap bill has been passed through the US Congress to prevent a government shutdown on 21st December. Donald Trump is pushing for a new funding bill for the 2019 fiscal year end in September.
EUR: CDU seeks replacement for Merkal
The process to find Angela Merkel’s replacement has begun via their party congress. This isn’t necessarily a market mover, but very interesting to watch what direction this will move the party in.
Euro GDP is due out at 10:00GMT but more importantly we also have wage growth data. A positive reading will have a significant impact on the ECBs inflationary outlook for 2019.
GBP: Three days left
GBPEUR and GBPUSD are remaining in their narrow ranges as nothing new or significant appears to be making its way into the media. The wider market sentiment still seems relatively resilient ahead of Tuesday’s vote, suggesting that a no-deal outcome will be avoided. However, if we’ve learnt anything about politics and markets over the past two years, it’s that the general consensus has been wrong.
For those worried about last-minute volatility or erratic trading conditions, the UK dealing teams will be available on Tuesday evening.
Have a great day and weekend ahead.