That day has come, guys! The Fed will hold a meeting at 21:00 GMT+3. It can be a highly impactful event. The markets expect the bank to hint about the timing of tapering.
It’s Time for Economy to Recover! Or Is It?
1. United States’ Bureau of Labor Statistics shared lots of positive data:
- Average Hourly Earnings are rising by 0.4% month-to-month with a forecasted 0.3% change.
- NFP (Non-Farm Employment Change) is better-than-expected (943K vs. 870K).
- Unemployment rate is also in a good shape with 5.4% actual vs. 5.7% expected results.
2. Canada has published worse-than-expected employment change data (94.0K vs. 148.5K). The unemployment rate is slightly worse with a 7.5% actual rate and 7.4% forecasted (it is better for currency if an actual rate is less than forecasted).
NFP is here
Strong results for the US may hint us that tapering bond buys is closer than we might think. This is the second consecutive strong NFP report in a row, and with every passing release, the chances for the world’s most powerful central bank to stop its constant debt purchasing are increasing. The next several hours were extremely bearish for gold, one of the safe-haven assets.
CAD is under pressure
With so much focus on the US Non-farm Payroll data on Friday, traders may be forgetting about one of Canada’s most important economic data releases: July’s Employment Change! The country added 94,000 positions last month and the unemployment rate fell to 7.5% from June’s 7.8%, Statistics Canada said Friday. As it stands, the economy has recovered about 92% of its pandemic job losses, leaving another 246,000 positions to go. In regular times, it would have been a staggering month of job creation. But in the context of a summer reopening, the July result fell short of expectations.
Another reason for CAD to slump is oil price falling due to production increase and greenback strengthening. As a result, CAD has suffered a drop against USD.
Prospects of fewer dollars printed mean a stronger greenback, while the specter of rate hikes gives investors a cause for a pause when coming to stocks. Shares of tech companies will likely bear the brunt of losses. Keep your eyes on life charts of the biggest tech companies, like Apple, Amazon, Facebook, and many others.
A selloff in stocks stopped. S&P 500 has reversed up from the 100-day moving average. It should be the perfect time to buy the index.
The FOMC, a committee within the Federal Reserve, will hold an important meeting and press conference on September 22 at 21:00 MT time (GMT+3).
The Fed can start tapering already this November, oil is rallying pushing the Canadian dollar up! Jump in to know more!
Germany, the leading economy in the Euro Zone, will reveal one of the key economic indicators – German Ifo Business Climate on September 24 at 11:00 MT time.
On Wednesday, September 22, Microsoft will be holding a product launch. The event starts at 18:00 GTM + 3.