The US Non-farm payrolls expected to hit 235K, unemployment rate forecast to remain at 3.6%
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The NASDAQ has declined over the past two days bringing the price back below previous significant levels. The index’s price action has slightly improved since the European Trading Session opened; however, investors will mainly monitor the price movement once the US market opens. Global equities rose slightly over the past hour after European traders entered the market.
NASDAQ 1-Hour Chart on April 6th
A lower level of order flow is also influencing the stock market as we edge closer to Catholic Easter. Therefore, price movement may be backed by something other than significant orders and traders. Technical analysis in the short term on the 30-minute and 15-minute timeframes points towards a decline as the price trades below the 100 Moving Averages and the Relative Strength Index.
Economic data
Recently the stock market has come under pressure from poor economic data. The latest ISM Services PMI drops to 51.2, the lowest in 3 months. The PMI data is lower than expected and lower than the previous month’s figures. The JOLTS Job Opening data and the ADP Non-Farm Employment Change were also significantly lower. Investors are now paying attention to tomorrow’s NFP, US Unemployment Rate, and the Average Hourly Earnings.
The market predicts the NFP figure to decline from 511,000 in February and 311,000 in March to 235,000. Investors expect the Unemployment Rate to remain at a competitive 3.6%. If the NFP data is lower than expected and the Unemployment Rate is higher, then the US stock market may be further pressured by recession fears. This scenario also supports the price of safe haven assets such as Gold and the Yen.
Read the first part: Judging from Koning's advices, ECB may hike the rate by 50bp and abandon previous rates targets | FXMAG.COM
Summary:
- Global indices have recently declined, but price movement slightly improved as EU traders entered the market. The global index which managed to hold onto gains was the Dow Jones which climbed 0.24%, and the FTSE100, up 0.35%.
- The stock market comes under pressure from poor economic data and a higher risk of a recession.
- European Central Bank’s monetary policy committee members have locked horns over the Eurozone’s monetary policy.
- For most economists, the ECB will hike a further 0.50% before keeping the interest rate unchanged.
- Investors turn their attention to tomorrow’s US employment figures and if they will point towards a weakening employment sector.
