The NFP employment data from the US is expected today at 14:30 CET. What can we expect now after the less than positive data over the course of the week?
Poor guidance from the PMIs
Looking back at last week's data, it casts considerable doubt on the forecast 202,000 new jobs in the Non-Farm Payrolls (NFP). On Monday, the purchasing managers' index (PMI) for the manufacturing sector came in slightly better than expected. However, at 48.4 points, it remains below the important 50-point mark that separates growth from decline. The fact that the PMI for prices fell from 54.8 points to 50.3 points can also be seen as a bad sign, which may completely cancel out the positive effect of the first slight increase.
The PMI for services, which make up the most important part of the US economy, looks worse. Although it is still above the 50-point mark, it has fallen significantly from 56 points in the previous month to 52.1 points now. Analysts had expected only a slight fall to 55.5 points. The PMI for employment in the service sector has also fallen from 53 points to 51.5 points.
ADP and unemployment figures are rather pessimistic
The ADP employment change figures provided an initial impression of the possible outcome of today's NFP figures. On the one hand, they were 20,000 jobs below forecasts at 146,000. But the previous month's result was also revised downwards by 49,000 jobs. These figures are also reflected, at least in part, in the data on initial applications for unemployment benefits. At 224,000, the number of new applications was 9,000 higher than the expected 215,000. The previous month had to be revised slightly upwards by 2,000 applications. Even though the NFP figures have often come as a surprise, the figures do not point to another surprise.
How will the markets respond to the NFP?
Recently, the markets have often reacted rather atypically to macroeconomic data. The gold price in particular has partially decoupled itself from the development of the US dollar. It currently looks like it is in a holding pattern until the NFP figures, fluctuating between 2634 $ and 2644 $. If the figures do indeed disappoint today, this would be a strong sign that the US Federal Reserve will cut interest rates again at its meeting next week, which usually has a positive effect on the gold price. In this case, it is likely that the gold price will resume its upward trend.
For the US dollar, on the other hand, this would be a negative signal. Having already weakened as a result of the rather poor data this week, this trend could pick up speed if the figures are disappointing. In this case, the EUR/USD exchange rate could move back towards 1.07.
The prospect of a further rate cut would be positive news for indices and equities. It therefore cannot be ruled out that the indices will once again aim for new record highs.
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