Investors Cautious Ahead of NFP
Markets opened in the States yesterday a bit cautious ahead of a week in which we will be inundated with economic data. This is data that was delayed by the recent U.S. Government two week long budget shutdown.
U.S. indexes were mixed, in quiet narrow trading, on Monday. The S&P did hit another intraday record high but investors are being very cautious ahead of today non-farm payroll report (NFP) that has been delayed since the first week of October. We will receive that later today. We are expecting a print of 180K before the shutdown.
Chicago Federal Reserve President Charles Evans that it will be “tough” for the Fed to determine the strength of the U.S. economy and its recovery. Looks like we will not get any tapering of the asset purchase program at the FOMC’s October meeting.
The S&P 500 rose a meager 0.16 points to finish trading 1,744.66. The average hit another intraday record high. Looks like those expecting a pullback here has to wait until 1,729 is broken. Until that happens the S&P will continue to climb.
The Nasdaq Composite was up 5.77 points to finish at 3,920.05. Another 13 year high for the tech heavy index. The DJIA was pretty flat closing down a little over 7 points to finish at 15,392.20. We were trading within a tight 50 point range most of the day.
The Australian benchmark closed up, outperforming in Asia, to hit a new five year high at 5,366 points. The Nikkei 225 is now above the 14,700 level and the South Korean Kospi moved a tad lower off its two year high seen on Friday. The Shanghai Composite was also down a bit on the day.
The EUR/USD (1.3664) has been trading a bit steady and sideways as investors are waiting on the NFP report due out later today. We are looking bullish to test 1.3800 then 1.3850 at this point. We should see profit taking there and a dip. The U.S. Dollar Index (76.70) is still below 80.00 and below the 200 daily moving average which is at 79.87.
GBP/USD (1.6121) has fallen as the resistance at 1.6200 held. We will consolidate a bit here before moving higher. Look for this market to trade from 1.5910 to 1.6200.
AUD/USD (0.9646) is continuing to trek higher. We are now targeting the resistance level found at 0.9750.
Let us take a look at the metals today.
Gold (1313.50) has fallen. The resistance at 1325 is proving to be a tough level. At this point we are looking bearish for 1275 if 1300 breaks. Silver (22.085) is testing support at 22.00 now. If it holds, we can bounce back up towards 23.00. Copper (3.299) is now testing the support/former resistance at 3.300. We are consolidating but if that level breaks we can aim for 3.2500.
Today all eyes are on what the NFP will print later in the day. We are expecting a 180K jobs created before the shutdown. I lower number will disappoint the markets and maybe take some of the wind out of the S&P rally. We will wait and see.