Yesterday’s US data gave us a clear indication of investors risk sentiment as we saw relatively good data being discounted with marginal gains in the USD while negative data saw large moves against the green back as traders were quick to get out of longs at the sign of any trouble.

Today’s data will have magnified effects on risk sentiment and the value of the USD, gold and equities. The key figure, as always, is the Nonfarm Employment Change which is expect to come in at 188K, significantly lower than the last month’s bumper 255K. Better than expected data will see the USD gain ground against its counterpart’s while gold slides and equities retrace. On the other hand worse than expected data will see the USD depreciate as gold and equites move higher.

Also worth noting is the Average Hourly earnings figure which is expected at 0.2%, lower than last month’s 0.3%. The figure is an importing supporting release as an increase in employment is one thing but an increase in employment and higher wages is a whole new beast, which has far reaching consequences for the future health of an economy, as factors such as consumer spending and confidence enter the arena. Better than expected earnings will see the USD appreciate while gold and equities slide while worse than expected data will see the USD depreciate while gold and equities climb. Mixed data will likely see a spikes across the board as markets price in either the good first and the bad second or the bad first and the good second. Either way, volatility is expected to be at a weekly high allowing for many trading opportunities.

Today’s upcoming economic data is as follows:

UK

  • Construction PMI expected at 46.6

CAD

  • Trade Balance expected at -3.2B
  • Labour Productivity q/q expected at 0.2%

USD

  • Average Hourly Earnings m/m expected at 0.2%
  • Non-Farm Employment Change (NFP) expected at 180k
  • Unemployment Rate expected at 4.8%
  • Trade Balance expected at -43.0 B
  • Factory Orders expected at 2.1%