- European indices open higher after mixed Asian session and yesterday rally on Wall Street
- US Non-Farm Payrolls (NFP) report in focus of global markets
- A reading of consumer sentiment and inflation expectations by the University of Michigan
After a mixed Asian session, but a great one on Wall Street yesterday, European stock markets opened higher on the final day of the week, in anticipation of the US NFP report (1:30 PM GMT). A likely lower-than-forecast reading would cement the market's belief that the Fed will 'soften' next year and cut rates faster and more than the current line of communication would indicate, weakening the dollar. Meanwhile, Wall Street is expecting a higher-than-previous reading for the change in employment in the U.S. non-farm sector. Macro data published earlier in the Asian session mostly concerned Japan, where the GDP revision yielded a 0.7% drop k/wk versus a 0.5% decline in the first reading. New Zealand's industrial production sales fell 2.7% y/y vs. 2.9% growth in the previous month.
Today we don't see any scheduled speeches by central bankers on the calendar, nor will we learn of any key macro publications from Europe. The final inflation data from Germany, published at 7:00 AM GMT., turned out to be in line with expectations. The markets' attention will shift entirely to the NFP report and the University of Michigan consumer sentiment reading (3:00 PM GMT). The market optimistically expects a decline in inflation expectations, with a slight improvement in consumer sentiment. The volatility of the currency market in the afternoon could be considerable, the bigger surprise in either direction the NFP will bring.
1:30 PM GMT - US, Non-farm payrolls (NFP)
- Employment change: 183k exp. vs. 150k previously
- Unemployment rate: 3.9% exp. vs. 3.9% previously
- Wages y/y: 4% exp. vs 4.1% previously
- Wages m/m: 0.3% exp. vs 0.2% previously
- Average hours worked: 34.3 exp. vs 34.3 previously
- Labor market participation rate: 67.3% exp. vs 67.3% previously
3:00 PM GMT - US, consumer sentiment according to the University of Michigan
- Consumer index: 62 exp. vs 61.3 previously
- Expectations index: 57 exp. vs 56.8 previously
- Current Conditions Index: 68.5 exp. vs 68.3 previously
- Inflation expectations (1-year): 4.3% exp. vs. 4.5% previously
- Inflation expectations (5-year): 3.1% exp. vs. 3.2% previously
