The FTSE 100 is up 0.1% this morning as investors await the US non-farm payrolls and unemployment reports. Economists are expecting an increase of 163,000 new jobs for June, and for the unemployment rate to drop to 7.5%.
The Federal Reserve’s main aim is to bring down the rate of unemployment, and, depending on whether the jobless rate increases or decreases, we could potentially see a large move in equities.
The mantra in the market these days is ‘good news is bad news’, meaning that good news for the economy may be bad news for the stock market. If the unemployment rates drop more than expected, we could see equity markets fall as the Fed is more likely to taper its stimulus package as a result.
Whatever the result, it is likely that trading volumes and market volatility will be low as traders sit on their hands ahead of the all-important release.