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02/05/2014: Trading outlook ahead of Non-farm Payrolls and the US session


As tradition dictates, markets have been cautious in front of Non-farm Payrolls, and rightfully so. This is a very important number today. Not just because it is Non-farm Payrolls which is widely considered to be the most important piece of economic data released every month. However, this month’s release will be the first number that is clean of excuses such as the weather. After the weather impacted growth in the first quarter, which the Fed confirmed in its latest FOMC statement this week, expectation is that there will be a bounce back in the second quarter. Today’s Non-farm Payrolls is the first real opportunity to see that bounce back. Last month’s ISM data for Manufacturing and Non-Manufacturing both missed forecasts, so I am not expected a number to shoot the lights out today. However anything above 200,000 would be a decent number.

This morning we have seen a slight amount of dollar strength, reflected in the Dollar Index ticking higher again. However the European indices have fluctuated between gains and losses, as traders jostle for position ahead of the data release. Since the early moves, the rates have basically settled and now seem set for the up coming data.

Gold and silver have both formed a small amount of support this morning, despite ethe dollar strength. However, both remain under pressure technically. Gold continues to be sold into strength around the $1285/1290 band. Silver is testing the crucial support band $18.80/$19.00.

Non-farm Payrolls at 13:30BST could change everything though…


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