Markets pause ahead of non-farm payrolls

Today’s US non-farm payrolls dominate City thinking.

London
Source: Bloomberg
  • Disaster strikes BHP Billiton’s operations in Brazil
  • IAG sees clear skies ahead as it upgrades its long-term guidance
  • Markets await crucial NFP figure

The first Friday of the month once again sees traders’ attention dominated by US non-farm payrolls. This time last month the data dashed Janet Yellen’s hopes of raising interest rates before the end of the year as the headline figure, the revision and the average hourly earnings all undershot expectations.

For the first time in 18 months expectations are below 200,000, a reflection of how dented optimism is after last month. The disaster in Brazil has seen BHP Billiton’s iron ore operations shut down, adding to the pressures the mining company has felt with weak commodity prices.

IAG continues to feel the benefits of low fuel costs and improving passenger numbers, and as such the firm has upgraded its long-term outlook for the next five years.

The rollercoaster ride that CRH shareholders have been enduring continues – the shares are climbing this morning thanks to expectations that the firm will benefit from increased US highway spending.

FX traders look set for another day of volatility after hearing from the Bank of England yesterday. They will now have the opportunity of assessing how strong US non-farm figures are. Given that December is now much more of a possibility for rate increases, today could be a make or break moment for the December 2015 rate hike believers.

Ahead of the open we expect the Dow Jones to start 20 points lower, at 17,843.

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