Markets are demonstrating mixed sentiment ahead of the NonFarm Payrolls due to be released on Friday. Even prices of major instrument have not changed too much from the beginning of the week. S&P broad market index has stuck around 3800 points, gold prices are hovering the level of $1720 per troy ounce. Currency market is showing a poker face. Crude prices are the only with outperforming volatility after unexpected OPEC+ decision to leave production quotas virtually unchanged. Brent crude prices first tumbled to $63 per barrel, quickly recovering to $68 after OPEC+ decision was announced.
However, mixed sentiment could be expected as we saw G7 countries February PMI data better than expected. That was a surprise that broke the line of seven consecutive weeks of stalling business activity. However, we need to get the U.S. NonFarm Payrolls results to get the whole picture. But the claim for swift economic recovery across the globe is clearly has been made.
U.S. Treasuries' yields are back on the upward track since Wednesday, trying to examine Federal Reserve Chair Jerome Powell if he has changed his mind over rising inflation caused by massive government spending without adequate rise of money supply. Powell seems to be a die hard, at least before stall warning sound for the markets would burst along with a deep correction of the stock market, leaving the Fed's no choice as to increase money supply.
Energy Information Administration on Wednesday announced a heart-breaking spike of crude reserves in the United States. Crude reserves soared by 21 million barrels, a single week rise that has not been recorded since 1982. Nevertheless, investors were too much focused on OPEC+ decision to averse this terrifying spike.
Apart the crude escapade the trading start of March was aligned to a standard NonFarm Payrolls week with low volatility before the publication of U.S. labour market data.
S&P broad market index continues to form a reversal pattern at 3800-3900 points with mid-term targets to the support levels at 3350 points and 2850 points. These targets are not for a week time. However, the market mat bring an unpleasant surprise. Nest week we may expect a decline in S&P 500 index to 3830 or 3765 points with a resistance level at 3920 points.
Oil market seems to be most promising as Brent crude prices are testing the resistance level at $67 per barrel with a brief spike to $68. So far, it looks like a fragile attempt that could be broken. So, traders should take caution to leave any positions opened over weekend.
Gold traders are taking a break close to the level of $1720 per troy ounce. It is unlikely that this break may turn to a reversal as U.S. Treasuries’ yields are high enough to attract most of investors' attention. So, targets below $1700 and even lower that $1650 per troy ounce are just a matter of time.
FX market this week showing less volatility as EURUSD and USDGBP are standing close to the support levels of 1.19600 and 1.38650. any confirmed breakthrough bellow these levels would lead to a deep slide of the Euro and the British Pound to 1.16200 and 1.35000 respectively.
USDJPY unnoticed broke the resistance at 106.50 and is heading towards 110.50. Is this level is going to be reached today would largely depend on NonFarm Payrolls data today.
Consensus suggests that U.S. labour market has added some 183,000 new jobs in the non-farm sector with unemployment remaining at 6.3% and average hourly payment up by 0.2% in February. We may suggest the last figure is quite accurate as labour force spending were up in February. The unemployment may edge lower to 6.1-6.2% as jobless claims fell by 466,000 last month.
We may also suggest the actual figure of NonFarm Payrolls in February may be lower than expected within the range of 60,000-117,000 new jobs vs forecasted 183,000. So, we may get mixed Non-Farm Payrolls results today.