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  • Mike Paterson

Markets waiting on NFP data

Friday 2 September 2022

Better risk sentiment to start the European session after the late equity market rally across the pond last night. FIrmer USD tones still prevailing overall albeit off its highs as I type as markets wait on the latest US jobs/wages data at 12.30 GMT. Gold still looking a little soggy but off its lows as is oil as markets continue to second-guess the Central Banks.

After last month's surprise the consensus seems to be a return to a slowing pace of job growth with guesses around 300k jobs added in August with 0.4% MoM average hourly earnings and a drop in the unemployment rate to 3.4%. Markets will be ready to price further hawkish tendency for Fed policy if decent data prevails with 75bps rate hike in Sept nailed on. Labour Day hols on Monday in USA and Canada so whatever happens in the immediate aftermath we may well see some position trimming into the NY close.

The second-guessing will continue as always so don't over-analyse but be ready with your preferred levels/strategy. Discipline is key as always but equally hesitation can often ruin a great idea.

GBPUSD: Fresh lows of 1.1500 in yesterday's retreat driven lower again by the stronger USD. Some pips banked again per ongoing strategy and my tweet. Patience a virtue still but I prefer the rally-sell side. EURGBP: EUR demand overall still for the moment and we've seen 0.8600 hold in the retreat as markets continue to price in next week's expected 0.75% rate hike from the ECB. Sellers poised between 0.8650-80. GBPJPY: Yesterday's Softer risk tones saw a test of 161.00 but the late equity rally in US saw a break through 161.80 to test 162.20. We can expect some fragile price action still.

EURUSD: USD demand still helping to cap this pair after yesterday's extended fall to 0.9911 and bounce into 1.000.Rally sellers including me still poised. USDJPY: USD demand and better risk JPY supply helping to underpin again and pushing on through 140.00 this time before capping at 140.43. Good two-way business to be had I think still ableit admittedly with an upside bias as I said yesterday All eyes on NFPs....EURJPY: Double flow whammy (EUR demand/JPY supply) still helping to underpin this pair but capping around 140.20 after yesterday's hold of 139.00.USDCHF: A decent rally through 0.9800 on the USD strength yesterday but capping at 0.9860 then 0.9820 as rally sellers remain poised. Now finding support at 0.9785 as I type helped by some EURCHF dip demand too amid rate hike hopes and with the SNB never far away. EURCHF: Finding good support at 0.9760 amid the general EUR demand after capping at 0.9320 with sellers ever poised on inherent CHF demand too.

AUDUSD: Finding good support around 0.6780-85 again now after the cap at 0.6840 I highlighted yesterday held once more. GBPAUD in retreat again as AUDUSD out-performs GBPUSD once more and currently testing 1.6980 from another cap at 1.7030. NZD holding 0.6060 this time but looking a little soggy still as USD remains underpinned overall. GBPNZD capping around 1.9050 again after a small break higher but 1.8950 in sight again as NZDUSD holds up better than GBPUSD.USDCAD: Capped at 1.3200 as oil prices turned higher and some USD longs trimming into NFPs but support forming around 1.3125-30.

The mighty Shrimpers run out at the hallowed Hall again tomorrow full of optimism and with the top news that our brilliant young Polish defender, formerly on loan from Sheffield United has signed a 2-year contract. Onwards n upwards....!

Have a great weekend wherever yours takes you.

Interbank rates: 08.35 BST

GBPUSD 1.1562

EURUSD 0.9993

EURGBP 0.8641

GBPEUR 1.1575

GBPJPY 162.16

GBPCAD 1.5201

GBPCHF 1.1322

GBPZAR 20.0125

GBPHKD 9.0052

USDJPY 140.21

EURJPY 140.12

EURCHF 0.9783

EURHKD 7.7765

AUDUSD 0.6800

NZDUSD 0.6080

USDCAD 1.3146

USDCHF 0.9791

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