2019-11-11 • Updated
It’s the first Friday of September that means that the United States will release labor market data for August at 15:30 MT time. This week has already been very volatile for EUR/USD and USD/JPY. Will the news release change anything?
Yes, there are no doubts that this release will have a big impact on the market as it’s the last one before the Federal Reserve’s September meeting.
ADP employment report, which is the same as NFP, except it’s prepared not by the authorities, but by a private entity, showed that 237K jobs were created in America last month compared to 185K expected. After this publication, many market players started thinking that NFP will come out strong as well. Remember though that ADP and NFP don’t always correlate.
History shows that August payrolls tend to disappoint the market. The reasons for such consistent pattern are not quite clear. It may have something to do with seasonal factors: American teachers quit jobs and are re-employed when the new school year starts. August is also a holiday season. Many people who do contract work don't take new assignments. There are also some tricky reasons to believe that wage growth (average hourly earnings) will be lower as well (this deals with the fact how the indicator is counted).
The Fed is closely watching the US economic figures as traders try to predict further actions of the US central bank. The devastating hurricane that ran over Texas diminishes the odds of the Fed’s rate hike this year (although the hurricane won’t affect this month’s NFP). A disappointment in labor data will make the US currency suffer a lot. At the same time, USD bulls will need a reading above the consensus forecast to continue the greenback’s recovery.
Here are the forecasts of some well-known banks.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.
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