Like clockwork another nonfarm Friday rolls around, perhaps explaining the noncommittal open in Europe.
There really wasn’t a lot going on after the bell. The FTSE continued to bob around the 7,065, falling 0.1%, while the DAX edged to a fresh all-time high of 15,675, and the CAC lurked at 6,500.
The futures are suggesting much the same for the US open, with the Dow Jones set to start Friday’s trading unchanged around the 34,600 mark.
However, one could argue that nothing this Friday really counts until the latest nonfarm jobs data is released around lunchtime.
Last month was a shocker, with the headline nonfarm figure coming in at just 266,000 against the near-1 million forecast. Yet it was a result that investors weren’t exactly unhappy with, given it may cause the Federal Reserve to reconsider any stimulus tapering talk.
For May, however, signs are pointing to a rebound. The ADP nonfarm reading on Thursday shot past expectations, rising from 654,000 to 978,000, while jobless claims have been steadily falling week-on-week, yesterday striking a pandemic-low of 385,000.
Analysts’ estimates have the nonfarm number climbing to 645,000, with the unemployment rate falling from 6.1% to 5.9%. Average hourly earnings are, as ever, the one outlier, with expectations of 0.2% against the previous month’s 0.7%.
Considering that nonfarm forecast lies somewhere between the levels expected last month, and the number produced last month, it will be interesting to see how investors react. It might hit that sweet spot – strong enough to point to a continuing recovery, but not strong enough to prompt any action from the Fed.
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