Exness Research Says Stock Futures Trade Lower Ahead of US NFP Data

(MENAFNEditorial) Investors are exercising caution ahead of tomorrow's release of important economic data, causing stock futures to trade lower. They are also assessing the potential impact on the oil market when Israil launches an attack.



It would not be wrong to say that the price action for this month has been very rough, as traders faced a number of unexpected events. Starting with the Fed Chairman, he made it clear to market players that they should not think that the Fed is on some sort of autopilot system that will only trigger a 50 basis points rate cut from them. After that, we had a major shock for the markets when oil prices soared on the back of the escalation of tensions between Iran and Israil, and traders do know that the movie hasn’t ended yet as there is much more to come on this. Thirdly, we have the US NFP data, which is due to come tomorrow, and if the number doesn’t meet the expectations, there will be plenty of fireworks for the markets.



Speaking of fireworks, the release of the US ADP number yesterday did not produce any significant fireworks. Remember, the market expectations for the US NFP data are not on the optimistic side; market players are expecting a reading that would show more weakness for the US job market. The US ADP is generally considered an important ingredient for the US NFP data because it sets the tone for the US NFP data, and the number released yesterday confirmed that the US private job market is solid and doing well. Now that the US ADP number has performed well, traders are trying to determine whether the US NFP will also print a better number, and if so, will good news be good news for the market? This is due to the market's expectation of negative news regarding the US job market, and the belief that a poor reading of the US NFP will prompt the Fed to intervene and lower interest rates by an additional 50 basis points.



Another important component of the US labour market is also the US Weekly Jobless Claims, and this number is going to influence the price action today. The number will be released at 1:30 PM BST, and the forecast for this number is to come in at 222K while the precious reading was at 218K. If the number indicates a decline in unemployment claims, traders may become more optimistic, but it also suggests that the Federal Reserve may not need to swiftly reduce interest rates.



Later in the day, we do have the US ISM services PMI numbers, and the forecast for the US PMI services number is for 0.1%, while the previous reading was at 5%. In addition to this, we have a number of FOMC members speaking, and it is highly likely that their stance may just add more noise rather than bring any clarity with respect to the Fed’s next policy move.



Gold Prices

Gold prices are trading in a tight range again today. The lows and highs of today were within the same range as those of yesterday, marking the second consecutive day of intraday volatility. This means that gold prices are highly likely to experience massive volatility, and this volatility could come either when the US NFP data comes out and brings a massive surprise for the markets. The other possibility is that if Israil attacks Iran, the attack becomes much more than what market players are anticipating currently.

Gold Chart by Exness

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