Market Braces For The NFP

USD Down Ahead of NFP

The US dollar has been a little lower over the European morning on Friday.

The market is bracing for the US September employment reports. A weak ADP print this week, as well as disappointing ISM readings, has seen traders showing caution ahead of the release.

The headline NFP print is expected to show a 140k rise last month, above the prior month’s 130k reading. Any downside will likely see USD sharply lower. USD index trades 98.51 last as the correction from 99 level highs continues.

EUR Rallies on Weaker USD

EURUSD has been firmer today against a subdued USD.

Despite the recovery in EURUSD this week, the near term outlook remains biased, given the ongoing data weakness out of the eurozone as well as the uncertainty posed by Brexit and the US trade war.

The US was given the all-clear this week from the WTO to press ahead with planned tariffs against the EU.

UK’s New Brexit Plan In Doubt

GBPUSD has been in the green today so far, although moves have been modest.

Johnson detailed his new Brexit proposals to parliament this week, following submitting the new deal to EU leaders.

The market is now waiting on a response from the EU though first glimpse reactions have been downbeat. GBPUSD trades 1.2335 last, still capped at 1.2382 for now.

Risk Weakens Again

Risk assets have been weaker again today following yesterday’s bounce off the week’s lows.

Weak data from the UK and US this week keeps the prospect of further central-bank easing alive which should support equities in the medium term.

SPX500 trades 2903.18 last, up off yesterday’s 2855.48 lows. Looking across the US data-sheet today, the US employment reports could still see late volatility on the week.

JPY & Gold Rally

Safe havens have ended the week on a firm footing with both JPY and gold higher against the dollar.

USDJPY has broken back below the 106.95 support today, trading 106.78 as of writing.

Weakness in equities markets, fuelled by concerns for global growth, has kept JPY well supported. XAUUSD trades 1508.93 last as price continues to pressure the 1522.75 level.

Crude Posts Small Recovery

Oil prices have seen a mild recovery today, fuelled by weakness in USD. However, crude ends the week in the red once again following another bearish report from the EIA which highlighted another build in US crude stores last week.

Over-supply in the market, alongside concerns over the demand outlook, keeps the near term bearish for oil. Crude is now retesting the broken 52.72 level from beneath.

CAD Data on Watch

USDCAD has been higher today so far despite firmer oil prices and weaker USD. Alongside the US employment readings today, traders will also receive CAD trade balance data.

If this reflects a loss of export earnings as a result of the trade war, this could fuel further downside in CAD. USDCAD trades 1.3329 last, having been rejected by the 1.3345 level yesterday.

Aussie Higher on Friday

AUDUSD has been higher again today over the early European session on Friday. The move higher comes despite retail sales overnight which came in weaker than expected.

Ongoing optimism ahead of the next US-China trade talks continues to provide a float for AUDUSD which has also been boosted by higher gold prices. AUDUSD trades .6755 last.