The latest manufacturing PMIs will be released, including those for Japan, Australia and China. The focus will be on the US Nonfarm Payrolls report. In addition, the US ISM Manufacturing PMI will be released. GDP will also be reported in Canada.
Here’s what to know on Friday, September 1:
On the first day of the new month, the main focus will be on the official US employment report. Non-farm payrolls are expected to show an increase of 170,000 jobs, while the unemployment rate will remain at 3.5%. Following the release of the NFP, the ISM Manufacturing PMI will be released, with an expected rebound from 46.4 to 47.
Data released on Thursday showed initial claims for jobless benefits fell to 228,000, below the 232,000 expected, marking the lowest reading in four weeks. However, claims for continued jobless benefits reached their highest level in six weeks. The underlying Personal Consumption Price Index, one of the highlights of the day, showed an annual rate increase of 4.1% to 4.2% in July, in line with expectations. These figures did not have a significant impact on the market. The US dollar posted moderate gains.
The dollar had mixed results, as it rose against its main European rivals, but weakened against the yen. Against the Australian dollar and the New Zealand dollar, the US currency was stable. The Canadian dollar fared better. The Dollar Index (DXY) rebounded from 103.00 and broke above 103.50 again.
US Treasury yields fell again, but at a moderate pace. The 10-year yield hit a fresh two-week low at 4.07% before bouncing to 4.11%.
The Euro eased on Thursday, despite softer inflation figures and expectations of tightening from the European Central Bank (ECB). The next ECB meeting looks very close. The EUR/USD pair failed to hold above 1.0900 and ended below 1.0850. EUR/GBP fell for the second day in a row and approached 0.8550.
“There is no room for complacency on inflation,” declared Bank of England Chief Economist Huw Pill. Depositary of the rise against the euro, the Pound lost ground against the Dollar, which caused the GBP/USD pair to fall below 1.2700. The pair does not offer clear signals as to its future direction.
USD/JPY hit weekly lows below 145.50, weighed down by US yields holding close to recent lows and US equities failing to stay in positive territory.
On Thursday, USD/CHF made a significant rally, rallying from its weekly lows and breaking above the 0.8800 level. On Friday, Switzerland will publish the Consumer Price Index (CPI) for August.
USD/CAD fell for the fourth day in a row and tested the 20-day SMA around 1.3500. If it consolidates below that level, it could open the door for further losses. Canada is scheduled to report GDP growth figures for June and the second quarter.
TD Securities analysts on Canada’s GDP:
Q2 GDP growth is expected to slow to 1.2%, giving the Bank of Canada further evidence that the rate hike is holding back demand. Consumption of domestic goods will be the main catalyst for the slowdown, while weaker construction and net exports should also weigh on growth. We also expect GDP to decline by 0.1% in June, with new flash estimates pointing to another weak performance in July.
The NZD/USD pair has traded sideways below 0.6000 and the 20-day SMA. The pair remains neutral in the short term, with key support at 0.5900.
The AUD/USD pair posted another daily close around 0.6470, slightly above the 20-day SMA for the second day in a row. Currently, the pair maintains a modest uptrend. However, to further solidify this outlook, you need to hold above the key 0.6500 level.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
