Asian Open: The US Dollar Sits Tall Ahead of Nonfarm Payrolls

Yet whilst price action on USD is almost trying to beckon a strong Nonfarm print, it’s almost asking to get toppled over if we throw murphy’s law into the mix of leading indicators.

Jobs 2

Asian Futures:

  • Australia's ASX 200 futures flat (0%), the cash market is currently estimated to open at 7,265.60
  • Japan's Nikkei 225 futures are up 120 points (0.42%), the cash market is currently estimated to open at 28,827.04
  • Hong Kong's Hang Seng futures are up 18 points (0.06%), the cash market is currently estimated to open at 28,845.95

UK and Europe:

  • UK's FTSE 100 index rose 87.69 points (1.25%) to close at 7,125.16
  • Europe's  Euro STOXX 50  index rose 14.59 points (0.36%) to close at 4,078.89
  • Germany's DAX  index rose 72.77 points (0.47%) to close at 15,603.81
  • France's CAC 40 index rose 45.99 points (0.71%) to close at 6,553.82

Thursday US Close:

  • The Dow Jones Industrial rose 131.02 points (0.38%) to close at 34,633.53
  • The S&P 500 index rose 22.44 points (0.53%) to close at 4,319.94
  • The Nasdaq 100 index rose 5.252 points (0.04%) to close at 14,560.05


Learn how to trade indices


Indices: S&P hits record high for 6th straight day

Another day, another set of strong employment data and record highs for the US stock market. Weekly jobless claims continued to fall and now sit at their lowest level since the pandemic began. And, in a separate report, intentions to lay-off staff by firms have hit a 21-year low. That said, the employment component of the ISM manufacturing index contracted to 49.9 from 50.9. But, taken alongside strong ADP beating expectations earlier this week (even if softer than the prior read), it’s not a bad set of data overall ahead of today’s NFP report. But, as Matt Weller points out, some leading indicators point towards a weaker-than expected NFP today which could lead to another disappointment for the highly anticipated release (and take the wind out of sentiment just before the weekend).

The S&P 500 hit a record high for a sixth consecutive session and rose 0.5%, led by energy, utility and financial sectors. Consumer staples was the only sector to close in the red. Nasdaq biotech stocks rose 1.16%, banking stocks were up 1.06% although the Nasdaq 100 was only up by 0.04%. FAANGS were down slightly at -0.05%.


ASX 200 Market Internals:


ASX 200: 7265.6 (-0.65%), 30 July 2021

  • Materials (0.08%) was the strongest sector and Consumer Discretionary (-1.3%) was the weakest
  • 9 out of the 11 sectors closed lower
  • 59 (29.65%) stocks advanced, 134 (67.34%) stocks declined
  • 9 hit a new 52-week high, 2 hit a new 52-week low
  • 71.36% of stocks closed above their 200-day average
  • 60.3% of stocks closed above their 50-day average
  • 46.23% of stocks closed above their 20-day average

Outperformers:

  • + 8.05%   -  Regis Resources Ltd  (RRL.AX) 
  • + 5.57%   -  St Barbara Ltd  (SBM.AX) 
  • + 5.43%   -  Nuix Ltd  (NXL.AX) 

Underperformers:

  • -5.93%   -  Chalice Mining Ltd  (CHN.AX) 
  • -4.92%   -  Iluka Resources Ltd  (ILU.AX) 
  • -4.51%   -  Metcash Ltd  (MTS.AX) 


Forex: USD retains extends its lead, BOE Bailey send GBP lower

The US dollar index (DXY) rose to a three-month high of 92.630 overnight as economic data hinted towards a strong NFP print, in turn bring expectations of a hike sooner than the Fed are currently making out. Let’s hope NFP excels to live up to bullish expectation, or else gains be quickly lost.

USD/JPY reached our first target in the European session and second target in the US and is now trading slightly lower around 111.50. Its next major resistance levels to conquer are the pandemic and highs at 111.71 and 112.22 (with 112.00 thrown in due to being a round number, of course). If today’s NFP data comes in strong enough it could reach 112.0 quite easily and possibly even 12.22. But, if it disappoints once again, we’d expect prices to close firmly beneath the March 2020 high of 111.70 this week and roll over. Therefore, the March 2020 high is a pivotal level around today’s FP report in our view.

The British pound was the weakest currency BOE’s governor Andrew Bailey after saying it was important to not overact (ie. raise rates) to rising inflation. GBP/USD broken beneath key support of 1.3784 to an 11-week low and EUR/GBP rose 0.43% to print a bearish outside candle. Incidentally, GBP/USD was the weakest pair and EUR/GBP was the strongest.

AUD/USD fell to its lowest level this year before finding support at the December 1st low It very much remains in the hands of today’s NFP report. AUD/CAD warrants a look as it has formed a bullish hammer at the June low (and just above its October low). Granted, its not the prettiest of trades but there is potential for a counter-trend bounce, particularly if Canada’s PMI data, building permits and trade balance data disappoints at 1:30pm tonight.


Learn how to trade forex


Commodities: OPEC+ send oil prices higher

Gold prices rallied for a second day and rose around 0.3%, which is not bad given the strength of the US dollar. We had tipped out hat to gold’s potential to rise yesterday although it didn’t quite reach our lower target of 1785. Still, with real-rates (represented by TIPS) continuing to fall, perhaps there’s till room for gold to rise from here.

The OPEC+ meeting sent oil prices higher after indicating they would increase production at a slower rate than expected. WTI rose 2.4% to 75.23 and brent rallied 0.53% to settle at 75.53.


Up Next (Times in AEST)


You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.


How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

More from Commodities

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.