European Open: UK Employment Data and US Inflation Report in Focus
Matt Simpson September 14, 2021 1:29 AM
It was a quiet session overnight, although we suspect volatility could begin to ramp up with UK employment and US inflation data scheduled for today.
- Australia's ASX 200 index rose by 2.7 points (0.04%) and currently trades at 7,427.90
- Japan's Nikkei 225 index has risen by 193.63 points (0.64%) and currently trades at 30,641.00
- Hong Kong's Hang Seng index has fallen by -24.34 points (-0.09%) and currently trades at 25,789.47
UK and Europe:
- UK's FTSE 100 futures are currently up 4 points (0.06%), the cash market is currently estimated to open at 7,072.43
- Euro STOXX 50 futures are currently up 10.5 points (0.25%), the cash market is currently estimated to open at 4,200.03
- Germany's DAX futures are currently up 36 points (0.23%), the cash market is currently estimated to open at 15,737.42
- DJI futures are currently up 261.91 points (0.76%)
- S&P 500 futures are currently up 24 points (0.16%)
- Nasdaq 100 futures are currently up 9.25 points (0.21%)
The Nikkei briefly traded at a 31-year high although prices have since reverted below the February high and the day is on track to close with a bearish pinbar. Due to the significance of the 30,714 high then it is reasonable to expect the rally to pause for breath at or below current levels.
The FTSE 100 rallied to a 3-day high and perfectly tested our upside target at 7089 before tailing off. Until we see a break above 7090 and or below 7000, range-trading strategies are preferred (bearish bias at highs of the range, bullish at the lows). That said, if prices can hold above 7055 today then we’d keep an eye on a potential breakout above 7090 with 7138 being an initial upside target. Should 7090 cap as resistance, then 7055 and 7000 become bearish targets.
View today’s video: S&P 500 Breaks Losing Streak, WTI Above $70
FTSE 350: Market Internals
FTSE 350: 4088.93 (0.56%) 13 September 2021
- 207 (58.97%) stocks advanced and 129 (36.75%) declined
- 13 stocks rose to a new 52-week high, 10 fell to new lows
- 72.08% of stocks closed above their 200-day average
- 62.11% of stocks closed above their 50-day average
- 13.39% of stocks closed above their 20-day average
- + 8.29% - Tullow Oil PLC (TLW.L)
- + 5.07% - Restaurant Group PLC (RTN.L)
- + 4.47% - Babcock International Group PLC (BAB.L)
- -6.61% - Civitas Social Housing PLC (CSH.L)
- -4.91% - Discoverie Group PLC (DSCV.L)
- -4.63% - IP Group PLC (IPO.L)
Forex: UK employment data and US CPI in focus
Core CPI is expected to remain steady at 0.3% MoM whilst the broader read (which includes food and energy) is expected to soften slightly to 0.4% from 0.5% previously. However, producer prices beat expectations on Friday so traders should be on guard for an upside surprise with CPI today. And with the FOMC meeting scheduled for next week some expectations of tapering, then today’s inflation report could be seen as a proxy for the Fed’s next move. Should inflation soften and remain transitory then it could reduce tapering expectations and weigh on the dollar. So dollar bulls should look out for a strong inflation report if they want to see the dollar bid ahead of the FOMC meeting next week.
But first we have UK employment data at 07:00, which maybe more of interest in light of hawkish comments from BOE Governor Andrew Bailey and reports of high wage growth due to skills shortages. Unemployment is expected to remain steady at 4.78% although average weekly earnings are expected to fall to 7.1% (7.4% prior) and add 66k jobs compared with the 95k added last month. Should these numbers come in notably above expectations then the GBP could move higher along with expectations for BOE to hike before they taper.
Learn how to trade forex
Copper is another market to watch regarding inflation and expectations for the Fed to taper. We noted a potential head and shoulders pattern on the daily chart and breakout of a bull flag. For them to stand any chance we may need CPI to remain weak as this lowers expectations of tapering.
Gold remains rangebound and we expect that to remain the case up until the CPI report., with a strong print potentially sending the yellow metal below 1780.
WTI is probing yesterday’s high, so we would now like to see it break on higher volume and close above 70.0.
Up Next (Times in BST)
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the pair you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
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.