US open: Futures rebound, USD falls as NFP misses

559K jobs were created in US in May, fewer than the 650k forecast. The data has calmed fears that the Fed could move sooner to taper support. The Nasdaq is outperforming whilst US Dollar declines.

USA (2)

US futures

Dow futures +0.25% at 34654

S&P futures +0.25% at 4203

Nasdaq futures +0.1% at 13550

In Europe

FTSE -0.45% at 7040

Dax -0.16% at 15630

Euro Stoxx -0.1% at 4075

Learn more about trading indices

Stocks rise as Fed fears ease

US futures are pushing higher rebounding from earlier weakness after a mixed non farm payroll report. The closely watch US jobs report revealed that 559k new jobs were created in May, a rise from April but this was short of the 650k that analysts had penciled in. This is the second straight month that the headline NFP report missed expectations as companies faced difficulties hiring.

Either childcare challenges as most school districts have not returned to full time in person learning or a lack of motivation thanks to the stimulus checks have meant filling vacancies is proving more challenging than usual for companies. Whilst this is driving up average hourly wages, the market it more focused on the fact that the headline NFP wasn’t a blowout number.

The data has helped calm those fears that dominated yesterday that the Fed could start to taper support sooner. The tech heavy Nasdaq which was hardest hit on Thursday is outperforming its peers today.

 Investors don’t consider that NFP could also push the Fed to taper support more quickly than the market had expected. As a result, the US Dollar is declining whilst stocks are heading northwards.

Where next for the Nasdaq?

Despite yesterday’s 1% decline the Nasdaq remains above its multi- month ascending trend line. It trades above its 100 day ma but below its 50 ma. The RSI is neutral at 50. The Nasdaq looks relatively range bound for now. It would take a move below 13400 the 100 sma and horizontal support for the sellers to gain traction. Buyers could be looking for a move above 13840 to confirm a bullish outlook.

Equities

The so-called meme stocks are likely to remain volatile again on Friday with AMC Entertainment seen opening lower after the cinema chain raised funds late on Thursday and closed 18% lower. The company has still doubled in value this week and jumped 450% this month as the new darling of retail of retail investors.

Docusign trades 5% high pre-market after beating in Q1 earnings.

Lululemon Athletica trades +0.9% pre-market after reporting an 88% jump in Q1 sales.

FX – USD drops, EUR sees disappointing retail sales

The US Dollar has fallen sharply following the NFP report.

EUR/USD is trading lower after Eurozone retail sales disappointed. Retail sales fell by -3.1% MoM in April, more than the -1.2% decline expected. This comes after a 3.3% MoM increase in March. Parts of the Euro area lockdown in April as the third wave of covid hit the continent.

GBP/USD+0.14% at 1.4125

EUR/USD  -0.11% at 1.2114


Oil set for weekly gains

Oil prices are pushing higher on Friday and are looking to book gains of over 4.5% across the week driven by a strong demand outlook. Demand is expected to continue rising in the US, China and Europe outstripping supply in the second part of the year and overshadowing weakness in Asia.

EIA inventory data revealed a bigger than anticipated draw in crude inventory of 5 million barrels versus 2.4m draw forecast.

Attention will turn towards the Baker Hughes rig count to see whether crude oil trading at its highest level since October 2018 is attracting more rigs to reopen.

US crude trades +0.22% at $68.88

Brent trades +0.12% at $71.32

Learn more about trading oil here.

The complete guide to trading oil markets


Looking ahead

15:00 US Factory orders

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