US open: Futures mixed after huge NFP miss

US futures are set for a mixed start after NFP report missed expectations by a mile. 253K jobs were added in August well below the 750k forecast. The data pushes back on the Fed tapering bond purchases.

USA (2)

US futures

Dow futures -0.06% at 35420

S&P futures +0.01% at 4534

Nasdaq futures -0.8% at 156011

In Europe

FTSE +0.07% at 7173

Dax +0.02% at 15845

Euro Stoxx -0.26% at 4220

Futures trade lower after NFP

US stocks are set for a weaker start following the US non-farm payroll report. The closely watched US Labour Department’s job report revealed that 253k new jobs were added in August well below than the 750k that were forecast. However, the July number was upwardly revised to over 1 million jobs to 1053k which has helped to offset some of the disappointment.

This was the smallest gain in job creation in 7 months. The fall in job creation comes as the delta variant has seen US covid cases rise but also amid difficulties filing positions.

The data supports the view that the Fed will hold off on tapering its bond purchases until later in the year. The Fed will still want to see more progress in the labour market recovery, as Powell said at the Jackson Hole Summit.

The unemployment rate declined to 5.2% this was in line with analysts’ forecasts and down from 5.4%. Average wages rose by more than expected to 4.3% YoY well ahead of the 4% forecast

Where next for Dow Jones?

The Dow Jones trades within its acceding channel dating back to mid-June. However, the bearish reversal on the RSI suggests that momentum is slowing. The price has struggled around 35500 this week with a move above 35600 needed to reach fresh all-time highs. A move below 35150 could negate the near-term uptrend. A move below the 200 sma at 34600 could see the sellers gain traction.

FX – EUR shrugs off slowing growth and declining retail sales

The US Dollar is falling as bets cool over the Fed moving to tighten policy following huge miss in NFP. More evidence of the recover in the jobs market will be required by the Fed to before it starts tapering bond purchases,

EURUSD is treading water despite weak retail sales figures and as a supply shortage saps the strength of the economic recovery in the Eurozone. Business activity remained strong in August falling to 59 down from July’s 15 year high of 60.2. This was down from the flash 59.2 treading earlier in the month. Growth momentum is fading amid supply chain issues and amid the rise of delta covid cases.

Eurozone retail sales fell by 2.3% in July as the consumer driven bounce back slowed at the start of Q3. The figure comes after retail sales jumped in June by 1.5%. Sales have been volatile amid the reopening.

GBP/USD  +0.12% at 1.3856

EUR/USD  +0.17% at 1.1893

Oil set for 2% gains on the week

Oil is edging higher for the third straight session. Oil is set to finish the week 2% higher amid easing fears over the demand outlook and expectations of a slow recovery for the US Gulf Coast export and refining hub from the hurricane that hit earlier this week. Oil prices have remained supported thanks to larger than forecast inventory draws, even as OPEC agreed to stick to the plan to add 400k barrels per day over the coming months.

Baker Hughes rig count data will be in focus later today.

US crude trades +0.29% at $70.06

Brent trades +0.59% at $73.36

Looking ahead

14:45 US Markit Services PMI

15:00 ISM Services PMI

18:00 Baker Hughes Rig Count

More from Indices

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 or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account