Investors Prepare for US Non-Farm Payrolls

Daily Analysis - 07/04/2017

Consensus Points to Rising Employment in March 2017

non-farm-payrolls


The U.S. Labor Department will release its widely-followed employment report on Friday. Economists surveyed by Reuters expect nonfarm payrolls to have increased by 180,000 in March. The unemployment rate is projected to remain unchanged at 4.70%.

Jobs Growth Seen to be Slowing


Readings in line with the consensus estimate should reinforce views that the economy remains fundamentally strong, despite GDP appearing to have slowed to a 1.00% annualized growth rate during the first quarter - compared with a 2.10% rise in the final three months of 2016.

During January and February, the economy saw job gains in excess of 230,000 as unusually warmer weather boosted hiring in weather-dependent sectors like construction and hospitality.

Economists see the trend reversing in March following the drop in temperatures and a storm that lashed the Northeast. A report on Wednesday showed private payrolls soaring by 263,000 jobs last month.

S&P 500 June futures are largely range bound ahead of the closely-watched data, with 2335 marking the floor and 2360 serving as a ceiling.

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Gold Hits 5-Month Peak


Gold is up over 1.00% to hit a near five-month peak on Friday amid safe haven buying triggered by the U.S. missile strikes against a Syrian air base, controlled by forces loyal to President Bashar al-Assad.

U.S. President Donald Trump ordered direct cruise missile strikes in response to the deadly chemical attack that took place in the rebel-held area, an official U.S. communiqué said. Investors were already on the edge as Trump met Chinese counterpart Xi Jinping for talks over potential flashpoints, like China's huge trade surplus and North Korea.

Gold was last trading around $1265.00 an ounce. On the upside, $1280.00 should present the next strong resistance, analysts reckon, with a majority expecting prices to continue pushing higher, at least until the situation de-escalates.

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Construction Expansion Slows in Australia


The construction sector in Australia continued to expand at a steady but slower pace in March, a leading survey showed on Friday. The Australia Industry Group’s Performance of Construction Index eased to 51.2 last month from 53.1 in February, but managed to stay above the 50-mark that separates expansion from contraction.

The index jumped to an eight-month high in February, reversing from four straight months of contraction and relieving concerns that domestic growth had faltered.

Australia’s $150 billion construction sector is a key driver of the broader economy, and the recent pick-up in activity further confirmed views that the economy has performed well during the first quarter.

AUDUSD is down in early morning trade, with the pair breaking below the key support level at 0.75300.

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Canadian Report Reveals Soft Building Permits Data


The value of building permits in Canada fell in February, hurt by a dip in construction plans for single family homes, elementary schools and government buildings, data from Statistics Canada showed Thursday.

Permits fell 2.50%, while January's figures were revised higher from the originally reported 5.40% to 5.80%. Building plans for single family homes plunged 5.40%, with the province of Ontario witnessing the largest decline.

However, plans for multi-family dwellings increased for a second consecutive month, up 3.00% on a jump in intentions for apartments in British Columbia and Alberta.

The Canadian Dollar shrugged off the weak numbers to remain largely unchanged post the release of data.

USDCAD is down on Friday, struggling to keep above the psychologically important mark of 1.34000.

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