Markets quiet as NFP looms

Heading into the close the FTSE 100 is up 15 points, but 17,000 on the Dow Jones is still an unfulfilled ambition.

US flag
Source: Bloomberg

FTSE above 6800

The FTSE has remained comfortably above 6800 for most of the day, and investors can be pleased with their work so far. Any bigger gain might have been viewed as irrational exuberance ahead of non-farm payrolls that would leave the index open to a nasty drop on Friday when US markets are out of the picture. Instead, quiet trading will now predominate with a little bit of deflation entering traders’ minds after the latest blow to British sporting hopes with the departure of Murray from Wimbledon.

Mike Ashley can rest a little easier tonight after he finally won his battle with Sports Direct shareholders – the combative retail expert has got his bonus at last. The Institute of Directors might warn about his unfettered powers but the success of his operation speaks for itself. Investors might complain, but so long as profits keep rolling in they are unlikely to decamp from the company.

US markets await NFPs

US indices are fractionally higher, and are stubbornly refusing to move into the red. But after a strong day yesterday, most are content to rest on their laurels and wait for non-farms tomorrow. ADP numbers were good, but this served more to reassure people than as a rationale for increased long positions.

17,000 is probably a bridge too far for now, but the pleasing round number is, given the recent performance of US indices, just a few days away. A speech from Janet Yellen provides an extra excuse to hold fire, although Ms Yellen can hardly be blamed if she chooses to stay tight-lipped on monetary policy. 

Gold meets heavy resistance

Gold’s latest attempt to hit $1330 is meeting heavy resistance, although it is undeniably positive that gold was able to hold on to its gains in the wake of a buoyant ADP report. Nonetheless, the major risk remains that gold will become vulnerable to short-sellers if tomorrow's non-farms are just as solid as their private-sector cousins.

Elsewhere NYMEX is fighting hard for $105, but found support after inventory data fell, indicating greater US consumption. Dip buyers have yet to materialise in NYMEX, but given previous patterns they should appear in due course.

Sterling moves higher 

A decisive rejection of the attempt to break through the 200-day moving average has seen EUR/USD fall today. However, this modest bout of dollar strength is taking place ahead of a speech by Janet Yellen that will likely provide little colour on interest rates. Once Ms Yellen sits down, the dollar will find itself friendless once again, while most traders wait for the non-farm payrolls tomorrow.

Sterling remains in fine form, leaping further today following the construction PMI from the UK. Service sector figures tomorrow are actually expected to be slightly weaker, so another good number could prompt some hurried buying of the pound in the morning.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Een artikel zoeken

Form has failed to submit. Please contact IG directly.

  • Ik wens per e-mail informatie van IG Group bedrijven te ontvangen over handelsideeën en IG's producten en diensten.

Voor meer informatie over hoe wij uw gegevens mogelijk kunnen gebruiken, bekijkt u ons Privacy- en toegangsbeleid en onze privacy website.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.