US open: Futures rise after jobs recovery strengthens

US NFP came in better than expected at 850,000 jobs created, ahead of 700,000 forecast. Unemployment ticked higher. The market doesn't consider that the Fed will move sooner to tighten policy based on these numbers. S&P futures are on the rise, US Dollar ticks lower.

USA (2)

US futures

Dow futures +0.27% at 34700

S&P futures +0.3% at 4333

Nasdaq futures +0.6% at 14650

In Europe

FTSE +0.1% at 7130

Dax +0.4% at 15660

Euro Stoxx +0.18% at 4087

Learn more about trading indices

S&P 500 hits fresh record high

The closely watched US non-farm payrolls revealed that 850,000 jobs were created in June, beating missing forecasts of 700k. The stronger than expected result comes after two straight months of forecast missing prints.

The unemployment rate unexpectedly rose to 5.9% in June, up from 5.8% in the previous month and worse and higher than the 5.7% expected. This might seem like bad news but it does mean that more people are returning to the labour market which is also good news given that vacacines are at a record high.

Meanwhile average earnings rose 3.6% YoY, UP from 1.9% in May and inline with forecasts. On a monthly basis earnings unexpectedly fell.

The data comes as consumer prices rise to historically high levels, but the Fed has made it clear that it will not start tightening monetary policy until the jobs marker shows substantial strength.

Today’s numbers indicate that the recovery in the labour market is on the right path but not powering ahead too quickly. Given the markets’s reaction of surging stocks and an easing US Dollar the market is not reading this as a report which will prompt the Fed to move sooner to tighten monetary policy. Instead this is a continuation in progress towards the Fed’s goal of full employment.

Where next for the S&P500?

The S&P500 futures charged higher to a fresh all time high of 4327 ahead of the NFP release. The bullish MACD keeps buyers hopeful of further gains. It would take a move below 4200 the ascending trendline and the 50 sma to negate the near-term uptrend. A move below 4140 the June low to see the sellers gain momentum.

FX – USD eases from recent high

The US Dollar is easing back from a 3 month high following the US NFP.

GBP/USD trades firmly sub 1.40 after falling steadily all week. Sterling trades under pressure amid rising Delta variant cases in the UK. Concerns are growing that Freedom Day, the final lifting of covid restrictions could be delayed or watered down as new daily covid cases top 27,000 a level last seen on 29th January.

EUR/USD struck its lowest level since April on US Dollar strength despite strong PPI wholesale inflation data for the bloc. Eurozone PPI rose 1.3% MoM in June, up from 0.9% in May and ahead of 1.2% forecast.

GBP/USD  -0.13% at 1.3744

EUR/USD  -0.23% at 1.1822


Oil holds Thursday’s gains after no OPEC+ deal was agreed

Oil rallied 2.4% on Thursday after the OPEC+ failed to agree to increase oil production. Oil prices are edging mildly lower today but are holding onto the lion’s share of the gains. Oil is set to gain over 1% across the week, the sixth consecutive week of gains.

The United Arab Emirates a key member in the OPEC+ alliance blocked a deal to raise output at the 11th hour. Bitter infighting resulted in the meeting being postponed and cast doubt on whether a deal to boost production can be agreed at all.

Oil prices have surged across the past 6 week, jumping over 10% in June alone. Soaring demand as economies reopen, combined with limited supply amid ongoing OPEC output cuts is keeping the market tight, boosting prices.

US crude trades -0.48% at $74.46

Brent trades -0.43% at $75.35

Learn more about trading oil here.

The complete guide to trading oil markets


Looking ahead

15:00 US Factory orders

18:00 Baker Hughes


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 Indices

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.