European Open: UK Employment Data and US Inflation Report in Focus

It was a quiet session overnight, although we suspect volatility could begin to ramp up with UK employment and US inflation data scheduled for today.

Charts (2)

Asian Indices:

  • Australia's ASX 200 index rose by 2.7 points (0.04%) and currently trades at 7,427.90
  • Japan's Nikkei 225 index has risen by 193.63 points (0.64%) and currently trades at 30,641.00
  • Hong Kong's Hang Seng index has fallen by -24.34 points (-0.09%) and currently trades at 25,789.47

UK and Europe:

  • UK's FTSE 100 futures are currently up 4 points (0.06%), the cash market is currently estimated to open at 7,072.43
  • Euro STOXX 50 futures are currently up 10.5 points (0.25%), the cash market is currently estimated to open at 4,200.03
  • Germany's DAX futures are currently up 36 points (0.23%), the cash market is currently estimated to open at 15,737.42

US Futures:

  • DJI futures are currently up 261.91 points (0.76%)
  • S&P 500 futures are currently up 24 points (0.16%)
  • Nasdaq 100 futures are currently up 9.25 points (0.21%)

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The Nikkei briefly traded at a 31-year high although prices have since reverted below the February high and the day is on track to close with a bearish pinbar. Due to the significance of the 30,714 high then it is reasonable to expect the rally to pause for breath at or below current levels.

The FTSE 100 rallied to a 3-day high and perfectly tested our upside target at 7089 before tailing off. Until we see a break above 7090 and or below 7000, range-trading strategies are preferred (bearish bias at highs of the range, bullish at the lows). That said, if prices can hold above 7055 today then we’d keep an eye on a potential breakout above 7090 with 7138 being an initial upside target. Should 7090 cap as resistance, then 7055 and 7000 become bearish targets. 

FTSE 350: Market Internals

FTSE 350: 4088.93 (0.56%) 13 September 2021

  • 207 (58.97%) stocks advanced and 129 (36.75%) declined
  • 13 stocks rose to a new 52-week high, 10 fell to new lows
  • 72.08% of stocks closed above their 200-day average
  • 62.11% of stocks closed above their 50-day average
  • 13.39% of stocks closed above their 20-day average


  • + 8.29%   -  Tullow Oil PLC  (TLW.L) 
  • + 5.07%   -  Restaurant Group PLC  (RTN.L) 
  • + 4.47%   -  Babcock International Group PLC  (BAB.L) 


  • -6.61%   -  Civitas Social Housing PLC  (CSH.L) 
  • -4.91%   -  Discoverie Group PLC  (DSCV.L) 
  • -4.63%   -  IP Group PLC  (IPO.L) 

Forex: UK employment data and US CPI in focus

Core CPI is expected to remain steady at 0.3% MoM whilst the broader read (which includes food and energy) is expected to soften slightly to 0.4% from 0.5% previously. However, producer prices beat expectations on Friday so traders should be on guard for an upside surprise with CPI today. And with the FOMC meeting scheduled for next week some expectations of tapering, then today’s inflation report could be seen as a proxy for the Fed’s next move. Should inflation soften and remain transitory then it could reduce tapering expectations and weigh on the dollar. So dollar bulls should look out for a strong inflation report if they want to see the dollar bid ahead of the FOMC meeting next week.

But first we have UK employment data at 07:00, which maybe more of interest in light of hawkish comments from BOE Governor Andrew Bailey and reports of high wage growth due to skills shortages. Unemployment is expected to remain steady at 4.78% although average weekly earnings are expected to fall to 7.1% (7.4% prior) and add 66k jobs compared with the 95k added last month. Should these numbers come in notably above expectations then the GBP could move higher along with expectations for BOE to hike before they taper.

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Copper is another market to watch regarding inflation and expectations for the Fed to taper. We noted a potential head and shoulders pattern on the daily chart and breakout of a bull flag. For them to stand any chance we may need CPI to remain weak as this lowers expectations of tapering.

Gold remains rangebound and we expect that to remain the case up until the CPI report., with a strong print potentially sending the yellow metal below 1780.

WTI is probing yesterday’s high, so we would now like to see it break on higher volume and close above 70.0.

Up Next (Times in BST)

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.

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