EU Morning Report

Focus turns to the Non Farm Payrolls report 

  • The US dollar edged higher against a basket of currencies yesterday but fell against the Swiss franc after better than expected economic data from the US. ISM Manufacturing surprised the markets after it showed an increase to 50.6 higher than the 48.5 expected. Today, the market's focus is on the most important and influential economic report for the currency markets, the Non Farm Payrolls expected at 12:30 GMT. The report will provide an insight about the health of the US Employment sector before a two-day Fed policy meeting next month. Against the Swiss franc, the greenback shed 2.1% falling to 0.7918 from 0.8088.
  • The euro plummeted yesterday weighed by escalating concerns about the eurozone debt crisis and poor eurozone Manufacturing data. Further pressuring on the single currency is speculation that the European Central Bank will abandon its hawkish stance at the monetary policy meeting next week. The pair shed 1.1% dropping to 1.4226 from 1.4377 and it was last trading at 1.4242. Versus the Swiss franc, the single currency dipped to 1.1280 from 1.1608, a decline of 2.8%. 
  • The British pound fell to a three-week low versus the dollar after weaker Manufacturing data from the UK. ISM Data showed that Manufacturing dropped at its fastest pace in two years raising concerns about the health of the UK economic growth. The pair dipped as low as 1.6131 from 1.6252. 
  • Oil prices ticked lower to 88.28 dollars a barrel from 89.89. Gold edged slightly higher to 1830.78 dollars an ounce from 1813.16. Silver also ticked higher to 41.80 dollars an ounce from 41.20.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4300 with a preference to enter Short positions at 1.4290
  • § The USDJPY pivot point is at 77.00 with a preference to enter Short positions at 76.95
  • § The OIL pivot point is at 87.65 with a preference to enter Long positions at 87.65
  • § The Gold pivot point is at 1810 with a preference to enter Long positions at 1810                    

Today's calendar and market movers:

  • § Europe Producer Price Index in July is forecast to gain 0.5%
  • § US Unemployment Rate in August is forecast to remain unchanged at 9.1%
  • § US Non Farm Payrolls in August is forecast to fall to 75K

Equity Markets:                                             

US equities were negative on Thursday with the S&P500 trading down -1.19% and the DJIA down -1.03%. The European bourses were mixed with the FTSE trading up 0.45%, the DAX down -0.94% and the CAC up 0.28%. The NIKKEI and the HSI at the time of writing are trading down -0.93% and -1.32% respectively.

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