Stock indices climbed higher in the Eurozone
Stock indices climbed higher in the Eurozone, alongside US futures contracts, as investors brace for the US jobs report.
Risk sentiment is on the rise everywhere in Europe this morning, with consumer cyclicals, industrial, energy and tech shares leading benchmarks higher towards new resistance levels following this morning’s German CPI data that came in line with expectations, and ahead of key macro developments in the US this afternoon.
All eyes are on the US employment sector as investors await further signs of cooling that could lead the Fed to confirm the monetary dovish switch many have already started to price in.
The nonfarm payroll is expected to show more job creations compared to last month (180K exp. vs 150K prev.) alongside the average hourly earnings, which is expected to go from 0.2% to 0.3%. Meanwhile, the unemployment rate is estimated to remain at the same level: 3.9%.
Like always, any number outside the “expected vs previous” window would likely cause a sharp price action in major FX pairs, treasuries and equities. However, with many anticipations of a cooling US economy already well on the table, NFP and average hourly earnings figures better than anticipated could dramatically reverse market sentiment across this wide range of assets, opening the door for a sharp short-term correction on stocks.
On the technical front, the STOXX-50 index is trading closer to its 4,500.0pts resistance, still inside its mid-term bullish channel.
Pierre Veyret – Technical analyst, ActivTrades
Risk sentiment is on the rise everywhere in Europe this morning, with consumer cyclicals, industrial, energy and tech shares leading benchmarks higher towards new resistance levels following this morning’s German CPI data that came in line with expectations, and ahead of key macro developments in the US this afternoon.
All eyes are on the US employment sector as investors await further signs of cooling that could lead the Fed to confirm the monetary dovish switch many have already started to price in.
The nonfarm payroll is expected to show more job creations compared to last month (180K exp. vs 150K prev.) alongside the average hourly earnings, which is expected to go from 0.2% to 0.3%. Meanwhile, the unemployment rate is estimated to remain at the same level: 3.9%.
Like always, any number outside the “expected vs previous” window would likely cause a sharp price action in major FX pairs, treasuries and equities. However, with many anticipations of a cooling US economy already well on the table, NFP and average hourly earnings figures better than anticipated could dramatically reverse market sentiment across this wide range of assets, opening the door for a sharp short-term correction on stocks.
On the technical front, the STOXX-50 index is trading closer to its 4,500.0pts resistance, still inside its mid-term bullish channel.
Pierre Veyret – Technical analyst, ActivTrades