Top 5 Things to Know in the Market on Friday

January 05
19:06 2018 – Here are the top five things you need to know in financial markets on Friday, January 5:

1. Traders wait for solid jobs growth

The U.S. Labor Department will release its December nonfarm payrolls (NFP) report at 8:30AM ET (13:30GMT) on Friday with markets prepped to receive a positive take on the American labor market.

The consensus forecast is that the data will show jobs growth of 190,000, following an increase of 228,000 in November; the unemployment rate is expected to remain unchanged at 4.1%, while average hourly earnings are expected to rise 0.3% after an increase of 0.2% a month earlier.

ADP’s monthly employment report, released a day earlier, showed the creation of 250,000 jobs in December which may have shifted market expectations for NFP to the upside.

An upbeat employment report would underline the case for higher interest rates in the coming months.

2. Dollar moves higher ahead of NFP

The dollar recovered some lost territory against major rivals on Friday, heading back towards the unchanged mark for the week after ending December at 91.83, as traders prepared for a battery of economic data.

Apart from the employment report, traders will focus on the ISM non-manufacturing purchasing managers’ index (PMI), durable goods orders and factory orders which will all be released at 10:00AM ET (15:00GMT).

At 5:49AM ET (10:49GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.19% at 91.77.

3. Global equities keep climbing

Global stocks continued their bullish trend on Friday while waiting for the U.S. employment report.

After the Dow closed above 25,000 points for the first time ever with all three major U.S. stock benchmarks at record highs, U.S. futures to a continuation of the bullish trend. At 5:50AM ET (10:50GMT),the blue-chip Dow futures rose 72 points, or 0.28%, S&P 500 futures advanced 8 points, or 0.28%, while the Nasdaq 100 futures gained 25 points, or 0.37%.

Elsewhere, European stocks also continued to rally on Friday, racking up weekly gains of around 2.5%. The benchmark Euro Stoxx 50 advanced 0.95% by 5:51AM ET (10:51GMT), Germany’s DAX rose 1.17% and London’s FTSE 100 traded up 0.34%.

Earlier, Asian equities shared in the positive view on global stocks with Japan’s Nikkei 225 ending 0.9% higher and China’s Shanghai Composite closing with gains of 0.2%.

4. Oil falls from 2015 highs as profit-taking ensues

Oil prices pulled back from highs not seen since May 2015 as traders opted to take profits Friday on the back of a 10% from December lows.

U.S. crude oil futures fell 0.90% to $ 61.45 at 5:52AM ET (10:52GMT), while Brent oil traded down 0.84% to $ 67.50.

Despite Friday’s losses, the U.S. benchmark was still up around 1.7% in the first week of 2018.

As market participants focus on the year ahead, they will weigh the production cut agreed between the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers led by Russia against increasing output from shale producers in the U.S. to judge the overall impact on global supply.

In that light, trades will watch the American side of the equation when Baker Hughes releases its most recent weekly rig count data to gauge active oil drillers in the U.S.

5. Euro zone inflation matches forecasts, Germany continues to show strength

In European data released early Friday, headline inflation in the euro zone eased to 1.4% as expected in December, compared to the prior 1.5%.

The core figure unexpectedly remained stable at 0.9% compared to the forecasts for it to advance to 1.0%.

The euro saw little movement in crosses with the dollar and pound as investors appeared to be more focused on the U.S. employment report out later.

Meanwhile, Germany, the motor of the euro zone economy, continued to give evidence of its strong economic standing at the head of the bloc as retail sales jumped 2.3% in November, smashing forecasts for a gain of just 1.1%.

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