European Open: FTSE bulls eye new highs, NFP on tap
Matt Simpson February 2, 2023 11:45 PM
We wrap off the week with today’s NFP report at 13:30 GMT, but first we’ll see if bulls can retain control of the FTSE 100 following yesterday’s breakout.
UK and Europe:
- UK's FTSE 100 futures are currently down -2.5 points (-0.03%), the cash market is currently estimated to open at 7,817.66
- Euro STOXX 50 futures are currently down -4 points (-0.09%), the cash market is currently estimated to open at 4,237.12
- Germany's DAX futures are currently down -23 points (-0.15%), the cash market is currently estimated to open at 15,486.19
- DJI futures are currently up 14 points (0.04%)
- S&P 500 futures are currently down -193.5 points (-1.51%)
- Nasdaq 100 futures are currently down -22.25 points (-0.53%)
FTSE 100 daily chart:
We have been patiently waiting for momentum to turn higher, which it finally did yesterday thanks to the dovish 50bp BOE hike. It closed above its recent consolidation, having formed several lower spikes which held above historic highs. From here we now fancy a retest of its YTD high and move towards 7900, near its record high.
Economic events up next (Times in GMT)
The US economy is expected to have added 188k jobs in January, which would be its lowest level since December 2020. But let’s not lose sight of the fact that job growth was expected to decelerate, and whilst it trends gradually lower the economy is still adding jobs whilst employment remains near historic lows.
Still, the ADP private employment missed estimates of 178k to add just 106k (~60% lower) so we should be prepared for a weak NFP print today. But we’d likely need to see a sub-100 print for it to make a noteworthy reaction, with unemployment also rising to 3.7% or higher.
However, markets may rejoice if we see a particularly soft print from average earnings as this would be deflationary. And that could weigh on the dollar as traders assumes an even less hawkish Fed.
Ultimately, the employment sector has held up relatively well considering the trajectory of rate hike and job openings continue to rise. So I suspect today’s NFP report will remain to be a day-traders event over a macro turning point.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.