Market Roundup
•US Average Hourly Earnings (YoY) (Aug) 3.8%, 3.7% forecast, 3.6% previous
•US Average Weekly Hours (Aug) 34.3, 34.3 forecast, 34.2 previous
•US Government Payrolls (Aug) 24.0K, 15.0K previous
•US Manufacturing Payrolls (Aug) -24K, 0K forecast, 6K previous
•US Nonfarm Payrolls (Aug) 142K, 164K forecast, 89K previous
•US Participation Rate (Aug) 62.7%, 62.7% previous
•US Private Nonfarm Payrolls (Aug) 118K, 139K forecast, 74K previous
•US U6 Unemployment Rate (Aug) 7.9%, 7.8% previous
•U Unemployment Rate (Aug) 4.2%, 4.2% forecast, 4.3% previous
•Canada Avg Hourly Wages Permanent Employee (Aug) 4.9%, 5.2% previous
• Canada Employment Change (Aug) 22.1K, 23.7K forecast, -2.8K previous
• Canada Full-Time Employment Change (Aug) -43.6K, 61.6K previous
• Canada Part-Time Employment Change (Aug) 65.7K, -64.4K previous
• Canada Participation Rate (Aug) 65.1%, 65.0% previous
• Canada Unemployment Rate (Aug) 6.6%, 6.5% forecast, 6.4% previous
• Canada Ivey PMI n.s.a (Aug) 50.3, 55.3 previous
• Canada Ivey PMI (Aug) 48.2, 55.3 forecast, 57.6 previous
•US U.S. Baker Hughes Oil Rig Count 483, 483 previous
Looking Ahead Economic Data(GMT)
•08:00 China Aug FX Reserves (USD) 3.256T previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro dropped against the dollar on Friday after a weaker-than-expected U.S. jobs report cast doubt on the likelihood of a substantial Federal Reserve rate cut this month. The report indicated slower employment growth in August, but the decrease in the unemployment rate to 4.2% pointed to a steady easing in the labor market. This prompted investors to reassess the chances of a significant 50 basis point rate reduction, with current expectations now favoring a smaller 25 basis point cut.Nonfarm payrolls increased by 142,000 jobs last month after a downwardly revised 89,000 rise in July. The dollar initially weakened against most major currencies following the jobs data release but quickly rebounded to trade higher. As a traditional safe haven, the U.S. currency gained support amid declines in stocks and other risk assets on Friday. The euro was down 0.21% at $1.1087. Immediate resistance can be seen at 1.1118(38.2%fib), an upside break can trigger rise towards 1.1185(Aug 20th high).On the downside, immediate support is seen at 1.1039(50%fib), a break below could take the pair towards 1.0958 (61.8%fib).
GBP/USD: Sterling weakened against the dollar on Friday after the latest U.S. jobs report led investors to scale back expectations for a larger-than-usual interest rate cut by the Federal Reserve this month. The report, a key event of the week, revealed that employment growth in August fell short of expectations. However, the unemployment rate's decline to 4.2% indicated a smooth labor market slowdown. Following the data, traders reduced their bets on a 50 basis point rate cut, now anticipating a 69% likelihood of a 25-basis-point cut when the Fed meets later this month, according to the CME FedWatch Tool. The Bank of England meets in two weeks to set monetary policy. Right now, the derivatives market shows traders see very little chance of a rate cut this month, but a quarter-point cut is fully priced in for November. The pound was about 0.4% lower at $1.3131.Immediate resistance can be seen at 1.32236(Daily high), an upside break can trigger rise towards 1.3265(Aug 27th high).On the downside, immediate support is seen at 1.3092(38.2%fib), a break below could take the pair towards 1.3052(61.8%fib).
USD/CHF: The dollar initially fell against the Swiss franc on Friday but recovered ground following a mixed U.S. jobs report, which solidified expectations for a Federal Reserve interest rate cut this month but introduced uncertainty about the scale of the reduction. The Labor Department's report showed that U.S. employment grew by 142,000 in August, falling short of the anticipated 160,000, while the unemployment rate decreased to 4.2% from 4.3% in July, indicating a gradual slowdown in the labor market. Fed officials indicated they would initiate rate cuts at their upcoming meeting, suggesting that without a policy adjustment, the cooling labor market could worsen. The remarks were widely seen as endorsing a 25 basis point cut while leaving the door open to further and perhaps bigger moves should the job market keep slowing. Immediate resistance can be seen at 0.8468(38.2%fib), an upside break can trigger rise towards 0.8518(50%fib).On the downside, immediate support is seen at 0.8391 (23.6%fib), a break below could take the pair towards 0.8350(Lower BB).
USD/CAD: The Canadian dollar fell to a two-week low against the U.S. dollar on Friday, driven by declining oil prices and uncertainty about whether domestic jobs data might prompt a quicker pace of interest rate cuts by the Bank of Canada. Canada’s economy added 22,100 jobs in August, but this was insufficient to prevent the unemployment rate from rising to 6.6%, the highest level in seven years, excluding the pandemic years of 2020 and 2021. The price of oil, a key Canadian export, dropped 1.9% to $67.86 per barrel, continuing its recent downward trend. The loonie was trading 0.5% lower at 1.3571 against the U.S. dollar, marking its lowest level since August 23. For the week, the currency declined by 0.6% Immediate resistance can be seen at 1.3578 (50% fib), an upside break can trigger rise towards 1.3627(61.8% fib) On the downside, immediate support is seen at 13526 (38.2%fib), a break below could take the pair towards 1.3480(23.6%fib).
USD/JPY: The dollar declined against the yen as markets trim expectations for aggressive Fed rate cut in September after August jobs report and Fed comments. Nonfarm payrolls increased by 142,000, falling short of the Reuters median forecast of 160,000, while the July figure was revised down to 89,000 from 114,000.The unemployment rate remained unchanged at 4.2%, and the annual growth rate of hourly earnings accelerated to 3.8%.New York Fed President John Williams indicated that it is now appropriate to adopt a less restrictive stance, though future adjustments will depend on incoming data. The dollar weakened 0.73% to 142.39 against the Japanese yen. Strong resistance can be seen at 144.22 (38.2%fib), an upside break can trigger rise towards 145.00 (Psychological level). On the downside, immediate support is seen at 141.90(23.6%fib), a break below could take the pair towards 141.49 (Lower BB).
Equities Recap
European shares fell for the fifth straight session on Friday, marking their worst day since early August, as U.S. jobs report offered mixed signals about the potential size of a Federal Reserve rate cut later this month.
UK's benchmark FTSE 100 closed down by 0.73 percent, Germany's Dax ended down by 148 percent, France’s CAC finished the day down by 1.07 percent.
U.S. stocks declined on Friday, pressured by a jobs report that indicated a continued slowdown in the labor market while leaving traders uncertain about the extent of future Federal Reserve interest rate cuts.
Dow Jones closed down by 1.01 percent, S&P 500 closed down by 1.73 percent, Nasdaq settled down by 2.55 percent.
Commodities Recap
Oil prices fell 2% on Friday, ending the week with a significant loss after weaker-than-expected U.S. jobs data for August overshadowed support from a delay in supply increases by OPEC+ producers.
Brent crude futures dropped $1.63, or 2.24%, to $71.06 per barrel, marking their lowest level since December 2021. Meanwhile, U.S. West Texas Intermediate crude futures fell $1.48, or 2.14%, to $67.67, reaching their lowest point since June 2023.
Gold prices eased on Friday, pulling back from near-record levels achieved earlier in the session, as mixed U.S. jobs data raised uncertainties about the extent of the Federal Reserve's interest rate cut later this month.
