Focuses will once again turn to US non-farm payrolls data today. Markets are expecting 200k job growth in December. Unemployment rate is expected to be unchanged at 3.7%. Average hourly earnings are expected to continue to grow solidly by 0.4% mom.
Looking at some related data, ADP private employment posted strong upside surprise of 235k growth. ISM manufacturing employment rose from 48.4 to 51.4, back in expansion. Four-week moving average of initial jobless claims was down slightly to 214k. Consumer confidence improved notably from 101.4 to 108.3.
Overall, the US job markets should continue to show much resilience despite high inflation and continuous tightening. The point of attention is more likely on wages growth and the implications on inflation ahead, and thus Fed’s policy path.
US stocks have been trading in tight range in the past two weeks, rightly so. S&P 500 is capped below flat 55 day EMA, which keeps near term bearish bias. Break of near term support at 3764.49 will resume the decline from 4100.96. More importantly, such development will affirm the case that whole correction from 4818.62 is still in progress for at least another low below 3491.58. Nevertheless, a strong close above 55 day EMA and 3918.39 resistance will instead indicate that rebound from 3491.58 is ready to resume through 4100.96. SPX’s reaction to today’s NFP data will be a clear indication of underlying risk sentiment, which should then guide the path of Dollar.
