Equity Futures turned lower early on Wednesday after doubts creeped in that President Trump will not go peacefully if the election outcome is not in his favour. Safe havens like the Dollar and Yen become attractive once more despite positive PMI data out of China.
Events leading up to the U.S. Non-Farm Payrolls (NFP) release on Friday the 2nd of October 2020:
U.S. ADP Non-Farm Employment Change
The ADP Non-farm Employment Change is expected to come in much higher than the previous month’s number at 648K and the data is expected today the 30th of September 2020 at 14:15 SAST.
Chart - The U.S. ADP Non-farm Employment Change
U.S Jobless claims:
Initial Jobless Claims - The initial jobless claims have been in a steady downtrend over the last couple of months since those record jobless claims numbers in April 2020. The Initial Jobless Claims number is expected to come in slightly lower than last week.
This week the Initial Jobless Claims data is expected to show initial jobless claims reduce to 850K and should be released on Thursday at 14:30 SAST.
Chart - Initial Jobless Claims
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. The data is also expected to see a slight decline in jobless claims to 12.22 million. The data will be released together with the Initial Jobless Claims on Thursday at 14:30 SAST.
Chart - Continuing Jobless Claims
With the first Presidential debate out of the way, market participants will turn their focus to the U.S. Non-Farm Payrolls this week. Economic growth and workforce employment are still a major concern as major corporations like The Walt Disney Company start to lay-off theme park workers.
The number of new Non-Farm jobs added in the month of September is expected to be lower than the previous reading for August of 1.371 million. The U.S. Non-Farm Payrolls number is expected to remain in positive territory at 850K employed.
The Average hourly earnings (M/M) data is expected to move lower to 0.2% from the previous months 0.4%. The Average hourly earnings (Y/Y) for September is expected to see an increase to 4.8% 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 U.S. Unemployment Rate is watched closely for signs of economic recovery and is expected to show a decrease from the previous reading to 8.2%.
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.
The Wall Street 30 was indeed at a tipping point last week as mentioned in our Technical insights and it looks like we might see more downside if buyers don’t step in.
The 27155 becomes a point of interest once again as the price action needs to stay above this level to negate the next down-trend and the formation of lower highs and lower lows.
Charting done on Metatrader5 GT247.com - WallStreet30 Daily
Take note: The outlook and levels might change as this outlook is released prior to the current day (Wednesday the 30th of September 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 2 October 2020 at 14:30 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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