US futures holding at the highs going into payrolls
The market is keeping steady for the most part as we continue to count down to the US non-farm payrolls release later today. US futures are not sensing much fear ahead of the key risk event, keeping near all-time highs in European morning trade.
Either way, US equities may still walk away from the aftermath higher regardless of what the payrolls data suggests later in the day.
A softer report, while poses questions to the US economy and adds to the growing number of data misses, just means that the taper timeline could be threatened.
All things considered, I still think that the Fed will acknowledge the start of taper discussions later in the month and those expectations are well anchored at the moment.
US equities may see a dent on economic fears but dip buyers have shown in recent weeks that hasn't fazed them and I don't see why a blip here would either.
There might be scope for some profit-taking in the day(s)/week ahead but it's hard to argue against the overperformance in US stocks throughout the year.
Going back to the non-farm payrolls release, a stronger report is likely to reaffirm taper expectations and keep the dollar in a firmer position ahead of the weekend.
That said, US equities have shown that they aren't too fussed about all the hawkish Fed talk and may keep the calm and carry on until there is something more concrete offered up by the Fed and/or Powell himself at the FOMC meeting this month.
