Spreadex Market Update
Dire morning for the European indices ahead of most important non-farm payroll since financial crisis
Worries only intensified about the state of Germany’s factory orders as Friday continued, causing the DAX to jump to a 200 point loss. The CAC, meanwhile, crossed in its own 3 digit decline following the reappearance of risk averse sentiment that at the opening bell. The FTSE continued the trend of limp European indices, with its losses climbing beyond the 100 point mark despite Brent Crude creeping back above $50 per barrel.
Of course, all of these European losses are just foreplay for the Big Daddy this afternoon: the US non-farm payroll. What was always going to be an important release has gained extra prominence in the last month; the Chinese market-mania has combined with intermittently impressive US figures to create an utterly baffling situation for investors in regards to trying to work out the Fed’s stance on a September rate hike. A decisive non-farm number will likely be under 200k in the case of the doves, and over 250k in the case of the hawks; frustratingly, analysts are forecasting 215k, a middling figure that is unlikely to provide the clarity investors are crying out for. Such a unrevealing number would like intensify the scrutiny of the US unemployment rate and wage growth, the latter especially one of the other key figures in the great interest rate debate.
FOMC super-hawk, and president of the Federal Reserve Bank of Richmond, Jeffrey Lacker is due to give a speech entitled ‘The Case Against Further Delay’ 20 minutes before the figures are released, something that could provide a bit of extra guidance for investors. Then again, it might not; Lacker is one of the more extreme figures in the Fed, and his views might be unrepresentative of the overall sentiment of the central bank.
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