Non-Farm Payrolls takes centre stage

7 September, 2018

Rob Bastin

Yesterday was a very quiet day on the markets following Wednesday’s volatile swings in Sterling rates. With no data released and a lack of Brexit headlines, the pound was able to take a breather yesterday and traded in a tight range against most major currencies. Cable finished the day much were it started and GBP/EUR was able to make very small gains thanks to a slightly weaker Euro in the afternoon session.

Today is the first Friday of the month and that always means one thing, US non-farm payrolls data is to be announced at 1:30pm and this release can cause significant volatility in not only Dollar rates, but also Sterling and Euro markets. Yesterday we saw some preliminary releases in the US with non-farm productivity coming in the same as last month at 2.9%. However, Services and ISM non-Manufacturing PMI figures saw contrasting results with services missing expectations at 54.8 down from 55.2, whilst non-manufacturing PMI increased strongly from 55.7 to 58.5. Ultimately the contrasting results had a balanced and limited effect on the US Dollar and so markets will now be looking to this afternoon’s unemployment rate and non-farm headline figures, forecast at 3.8% and 191k respectively.

Elsewhere today we also have revised Euro-zone GDP figures at 10am with no change expected, and unemployment data for Canada due out at 1:30pm at the same time as the US non-farms. GBP/EUR and GBP/USD rates are currently close to a 2 week high for buying and next week we have a big week of eco-stats that pose further risk to the pound, particularly Manufacturing production on Monday, unemployment figures on Tuesday and a Bank of England rate decision on Thursday. If you do not wish to gamble over these events then contact your broker today to take advantage of the higher rates we are currently seeing.