The U.S economy will be set alight this week with a full barrage of economic data while the world holds its breath while ballots are counted in the tightly contested Presidential election.
The votes are still being counted in this tightly contested Presidential race which has market participants on the edge of their terminals as the Trump campaign is doing better than expected.
Asian markets moved higher in a volatile session with the U.S Dollar and U.S 10-year Treasury yields on a roller-coaster ride. U.S Futures gained momentum after it became clear that the race to the White House might be tighter than everyone predicted.
Events leading up to the U.S. Non-Farm Payrolls (NFP) release on Friday the 6th of November 2020:
U.S. ADP Non-Farm Employment Change
The ADP Non-farm Employment Change is expected to come in much lower than the previous month’s number at 650K and the data is expected today the 4th of November 2020 at 15:15 SAST.
Chart - The U.S. ADP Non-farm Employment Change
U.S Jobless claims:
Initial Jobless Claims - The initial jobless claims have been trending lower over the last couple of months since those record jobless claims numbers in April 2020.
Chart - Weekly U.S jobless claims
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Continuing Jobless Claims – Continued claims have also become a focal point of interest and measures how many unemployed individuals qualify for benefits under jobless insurance.
Chart - Continuing Jobless Claims
FOMC Interest Rate Announcement - The Federal Open Market Committee (FOMC) is widely expected to keep the U.S Fed Funds Rate unchanged and keep the target rate at 0-25 basis points.
Chart – U.S Fed Funds Rate
The number of new Non-Farm jobs for October is expected to be slightly lower than the previous reading for September of 661K.
The Average hourly earnings (M/M) data is expected to increase to 0.2% from the previous months 0.1%. The Average hourly earnings (Y/Y) for October is expected to see a slight decline to 4.6% from the previous months number at 4.7%
The U.S. Unemployment Rate measures the percentage of the total workforce that is unemployed and actively seeking employment during the previous month.
The Non-Farm Payrolls report (NFP) is treated as an economic indicator for people employed during the previous month, and the number being released will have a direct impact on the markets. In the United States, consumer spending accounts for most of the economic activity, and the Non-Farm Payrolls report represents 80% of the U.S. workforce. Farmers are excluded from the employment figures due to the seasonality in farm jobs.
U.S markets moved lower over the previous week as new coronavirus infections spread economic uncertainty across the globe. The Wall Street 30 is expected to remain volatile this week as votes come in ahead of the FED rates decision and Jobs report.
The price action moved to lower supported by volume as mentioned last week but rebounded and is firmly above the 27155-support level again after making a lower low. We are not out of the woods just yet as the price action needs to regain the 28957-price level to negate the downtrend.
Charting done on Metatrader5 GT247.com - WallStreet30 Daily
Take note: The outlook and levels might change as this outlook is released during the current days (Wednesday the 4th of November 2020) U.S Market open.
Major indices to look at will be the S&P 500, Wall Street 30, Nasdaq 100
Major Forex pairs to look at will be EUR/USD, GBP/USD and USD/JPY
Commodity to look at will be Gold.
Index to look at will be the ALSI
Forex pair to look at will be the USD/ZAR
Rand Hedges (BTI, CFR) and Rand Sensitives (Banks and Insurers)
Non-Farm Payrolls are usually reported on the first Friday of the month, whereby the number of additional jobs added from the previous month is released. The US Non-Farm Payroll number will be released locally on Friday the 6th of November 2020 at 15:30 SAST.
Sources – Reuters, MetaTrader5
Barry Dumas | Market Analyst at GT247.com
Barry has 12 years experience in the financial markets. He enjoys educating clients on trading / investing and providing punchy technical analysis on securities. He currently holds a Wealth Management qualification and is studying towards becoming a Chartered Market Technician® (CMT) designation holder.
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