Spreadex Market Update
Dow jittery ahead of afternoon jobs report, analysts largely expecting non-farm improvement
The best UK manufacturing production increase in a year, jumping to 0.8% from 0.5% (doubling analysts’ forecasts of 0.4%) was countered by a dip in industrial production (falling to -0.2% from 1.0% last month), meaning the FTSE failed to gain any traction as the morning went on. Even an unexpected contraction in the UK’s trade balance deficit couldn’t help the index, with the day’s positive data negated by the continued declines for the majority of its mining stocks.
The Eurozone was far more negative than the FTSE; the weak German industrial production and French trade balance figures did early damage to the DAX and CAC respectively, and combined with the general jittery tone of trading this Friday has left both in the red by around 30 to 40 points.
Looking to the US markets and already investors have had a morning-taste of the 2015-defining rate-hike debate. Traditionally in the centre of the FOMC pack, hawkish comments from Dennis Lockhart have already caused a dollar surge, pushing the Dow futures down by around 20 points in the process. Lockhart remarked the US economy is in an ‘above-potential growth phase’ that leaves a December lift-off as ‘a possibility, but not a certainty’. That claim will be tested this afternoon with the non-farm jobs report, Lockhart’s comments only ramping up the tension before the numbers are revealed. Analysts are largely expecting improvements in all 3 key metrics; the actual non-farm number is forecast at 181k against last month’s dismal 142k, wage growth is expected to jump 0.2% and the unemployment rate may just fall to a 7 and a half year low of 5%.
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