US futures
Dow futures 0.01%, S&P futures 0.08% & Nasdaq futures 0.1%
In Europe
FTSE 0.32% & DAX 0.56%
- US ADP payrolls, jobless claims point to a weaker jobs market
- A September rate cut is almost fully priced in
- Salesforce falls, issuing weak guidance
- Oil falls on supply concerns
Trio of jobs data points to a weakening labour market
US stocks are set to open higher as investors digest weaker-than-expected job data ahead of the key nonfarm payroll report tomorrow, which could influence the Fed's path for rate cuts.
ADP payrolls fell by more than expected to 54,000 in August, down from 106,000 in July and below expectations of 65,000. Meanwhile, jobless claims are higher than expected at 237,000, up from 230,000, defying expectations of a fall to 229,000. The data follows job openings yesterday, which showed that job vacancies also fell by more than expected.
Treasurys are climbing as the trio of jobs data reinforced the view that the labour market is slowing, which could trigger a Federal Reserve rate cut in two weeks' time.
Ahead of tomorrow's nonfarm payroll report, which could be pivotal, the rate sensitive 2-year yield has dropped to 3.6% with money markets almost fully pricing in a 25 basis point rate cut in the September meeting and a further 25 basis point rate cut before the end of the year.
Tomorrow's nonfarm payroll report is expected to show 75,000 jobs were added in August, which would mark a fourth straight month of job growth below 100,000. Unemployment is expected to rise to 4.3% the highest level since 2021.
While a cooling jobs market and rate cuts are good news, should the jobs market deteriorate too much, investors could get spooked.
Corporate news
Salesforce's share prices are falling by over 6% premarket after the enterprise software giant's quarterly sales guidance missed forecasts, suggesting its AI product isn't yet paying off as quickly as hoped.
Figma is slumping over 15% after the design software group released Q1 earnings, its first since its blockbuster IPO earlier in the year.
American Eagle shares are surging over 26% after an advertising campaign featuring Sidney Sweeney helped fuel stronger-than-expected sales in Q2.
Nasdaq 100 forecast – technical analysis
The Nasdaq 100 is attempting to recover from the lower band of the rising channel, pushing towards 23,500 and the 20 SMA resistance. If buyers break above this level, $ 24k comes into focus. Sellers will need to break below the rising trendline support and the 50 SMA to open the door to 23,000, last week’s low and 22,780.
FX markets – USD rises, EUR/USD falls
The USD is rising despite weaker-than-forecast US data, which supports the view that the Fed may need to cut rates to support the jobs market.
The EUR/USD is falling amid a stronger USD and expected eurozone retail sales. Retail sales in the region fell 0.5% month on month in July and 0.3% in the previous month. This marks the steepest decline in almost two years and comes as consumer confidence weakened.
The GBP/USD is unchanged as UK budget concerns linger. The Autumn Budget, which will be unveiled on November 26, is likely to be pivotal for the UK economy and the pound. The pound is on track to fall this week despite stronger PMI data and despite BoE governor Andrew Bailey's warning over the timing of rate cuts.
Oil falls on over supply worries
Oil prices are falling amid rising expectations that OPEC+ will agree to increase production again in October when the oil cartel meets this weekend.
OPEC+ could agree to unwind 1.65 million barrels per day of output cuts, around 1.6% of global demand. The oil cartel has already agreed to increase output by roughly 2.2 million barrels per day between April and September. The prospect of increased supply is weighing on prices.
API data showed that crude oil inventories unexpectedly rose by 600k barrels, pointing to weaker demand and refining activity.
