Headlines:
- USD/JPY extends fall alongside bond yields to start the session
- Risk on the retreat as bond yields fall
- Preview: Why August non-farm payrolls frequently disappoint
- What would it take from non-farm payrolls to get a 50 basis point cut?
- We've seen the flop and the turn, it is now on to the river
- What are the distribution of forecasts for the US NFP?
- Weekly update on interest rates expectations
- Eurozone Q2 final GDP +0.2% vs +0.3% q/q second estimate
- Germany July industrial production -2.4% vs -0.3% m/m expected
- Germany July trade balance €16.8 billion vs €21.0 billion expected
- France July trade balance -€5.88 billion vs -€6.09 billion prior
- UK August Halifax house prices +0.3% vs +0.2% m/m expected
Markets:
- JPY leads, AUD lags on the day
- European equities lower; S&P 500 futures down 0.6%
- US 10-year yields down 3.4 bps to 3.698%
- Gold up 0.1% to $2,519.39
- WTI crude up 0.5% to $69.51
- Bitcoin down 0.2% to $55,977
It's all about the US jobs report today and there wasn't too much to work with in European trading as such.
There was some minor positioning flows early on, with traders keeping a bid in bonds. 10-year Treasury yields fell to just under 3.70% and that triggered some safety flows in broader markets.
USD/JPY fell from around 142.90 in Asia to a low of 142.06 before recovering back to near 143.00 again now. Meanwhile, USD/CHF also retreated to a low of 0.8405 before keeping down 0.2% at 0.8420 currently.
In the equities space, US futures were lightly changed early on but then fell across the board with tech shares leading the drop. S&P 500 futures were marginally lower by 0.1% in the handover from Asia to Europe. But that eventually spilled to a 0.8% drop at one point before holding just above that now.
With traders potentially sensing more kicking and screaming, this is arguably the most anticipated US jobs report of the year so far.
Market pricing for a 50 bps move by the Fed is ~40% now. So, we'll see how that as well as global growth concerns will change up after we get to the main event this week.
