Investors are favoring the euro and British pound today, Friday, as they await the US employment report that may indicate steady hiring ahead of a potential downturn. The report, however, might not offer clear guidance on future Federal Reserve policy due to overlooked household financial conditions and strikes. Economists predict an increase of 173,000 jobs in September, but forthcoming data could suggest a significant drop, providing mixed signals and boosting demand for risk assets.
Changes in the labor market and average earnings could heavily impact the Federal Reserve's future rate plans amidst escalating borrowing costs and a shrinking labor market. This could potentially prompt policymakers to abandon their hawkish stance as they approach the end of the tightening cycle. The EUR/USD technical picture indicates demand for the euro, with major players' support being crucial for maintaining control at specific levels. The GBP/USD position remains uncertain until control over 1.2190 is regained, with a potential for recovery towards 1.2220 and a possible touch at 1.2060.
In other market news today, European stocks recorded modest gains ahead of the US payrolls report, mirroring similar progress in Asian markets. This report is projected to reflect a hiring slowdown in September, which could lessen pressure on the Federal Reserve to hike interest rates further. Miners led the Stoxx 600 index following discussions between a Chinese iron-ore buying agency and global suppliers.
Energy stocks struggled due to concerns over demand and Brent crude's largest weekly fall since March. Shares of Royal Philips NV fell by 8.5% after agreeing to additional testing on certain devices. Despite minor losses in the Nasdaq 100 and S&P 500, US equity futures remained stable.
The nonfarm payrolls report is anticipated to show that US employers hired 170,000 workers in September, down from August's 187,000. This contrasts with the weaker than expected ADP employment report. Investors, including Barclays Private Bank's chief market strategist Julien Lafargue, are closely watching wage growth figures and job creation numbers.
The 10-year Treasury yield held at 4.74%, with Societe Generale (OTC:SCGLY) strategist Kenneth Broux suggesting that upcoming payrolls data and inflation figures, including CPI numbers, will influence its movement. Asian stocks were lifted by gains in Hong Kong's Hang Seng Index and optimism surrounding Golden Week consumption trends. San Francisco Fed President Mary Daly hinted that the central bank may keep rates on hold if inflation and the jobs market cool.
In the cryptocurrency market, Bitcoin rose slightly to $27,515.87 while Ether increased to $1,624.19. The MSCI Emerging Markets Index rose by 0.7%.
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