Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European markets were negotiating with some gains. Still, prudence should be the dominant note of the first part of the European session as investors await the publication of the US employment report. During this period, investors will react to companies results and monitor the behavior of oil. If no sudden movement occur it is expected reduced volume until 13:30, when the employment report in the US is published.
American indices extended the recent rise in a unintense session, marked by the slight decline in oil and some economic data. In recent weeks, investors’ perception on oil, has improved. However, after the strong recovery, oil listed in New-York is facing an important resistance in the zone of 35.60 USD / barrel (37.69 / 38.10 in Brent). While it should be the fundamental factors driving the price of crude is not to exclude a short-term correction, which may have an impact on equity markets. The number of weekly claims for unemployment benefits rose by 6,000 to 278,000, above the 270,000 expected. However, the productivity of enterprise workers declined at a slower pace than estimated. In turn, in February, the ISM index for the services sector declined from 53.5 to 53.4, against 54.0 estimated. As for the industrial orders rose 1.60% in January, after two consecutive months of decline, but below the expected 2.40% growth. Today, the publication of the employment report will be the main event of the day. With some surprise, inflation begins to approach the levels desired by the Fed. As private consumption the largest component of GDP and wages the main source of income for Americans, if wage growth speed then it is likely that inflation reaches the purpose of the Fed, forcing the central bank to raise interest rates. At this stage, the money markets allocate a modest probability (63%) to a rise in interest rates in 2016, which has given some encouragement to equity indices. In conclusion, the ideal for the equity markets would be that the indicators describe an American economy far from precipitating a recession but not so dynamic to raise a sharp rise in interest rates.
Asian markets closed with modest gains, as investors await the publication of the US employment report.