Markets watching the RBA, OPEC, and US NFPs

March 01, 2021 10:00

The first week of a new month starts off with some major economic news announcements that are likely to affect most markets. This includes US Manufacturing PMI (Purchasing Managers Index) figures on Monday, the Reserve Bank of Australia (RBA) announcement on Tuesday, OPEC meetings on Thursday and US Non-Farm Payroll figures on Friday. 

However, considering the British pound has been the strongest currency so far this year, most attention may be on the UK Annual Budget Release on Wednesday. In this release, traders will assess the plans from the Chancellor of the Exchequer on rebuilding the economy. 

Company earnings announcements start to wind down with only a few companies left to report including Post NL, Zoom, Urban Outfitters, Abercrombie, Splunk, Snowflake and many others. 

You can learn more about some of the global themes affecting the markets in this selection of education articles:

Weekly Forex Calendar

Source: MetaTrader 5 trading platform provided by Admiral Markets

 

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Trader’s Radar - US Non-Farm Payroll

On Friday 5 March, the Bureau of Labor Statistics releases the most widely watched economic data points every month. This includes the Non-Farm Employment Change, Unemployment Rate and Average Hourly Earnings. 

The forecast for February’s employment figures is for a rise in the number of jobs that have been added to the economy. In January, the US economy only added 49,000 jobs. This is also why analysts are forecasting the unemployment rate to move higher for last month as well. 

Source: Admiral Markets MetaTrader 5, USDX, Monthly - Data range: from Nov 1, 2004, to Feb 28, 2021. Performed on Feb 28, 2021, at 7:00 pm GMT. Please note: Past performance is not a reliable indicator of future results. 

 

The US dollar has continued to be one of the weaker performing currencies this year, as it was last year. However, the US dollar index which represents the value of the US dollar against a basket of other currencies is trading at a strong horizontal support level at ~89.20. 

A good employment report could bring buyers back into the market as they did so with force in March 2018, sending the index back to the top of the long-term consolidation at ~102.94. If the US dollar index does manage to push higher this could spell trouble for the likes of the euro, British pound and Australian dollar which all sold off late last week.

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Corporate Trading Updates and Stock Indices

Global stock market indices took a hammering last week, with all major indexes ending down for the week. A surge in bond yields caused some investors to be concerned about the long-term growth prospects of equities in the face of rising inflation. The major tech companies felt the brunt of this with the Nasdaq 100 index falling much further than the S&P 500 index. 

The next move in stock markets may depend on the direction of the US dollar this week and what that does to bond prices. However, technically, the trend is till up, as shown in the chart below. 

Source: Admiral Markets MetaTrader 5, SP500, Daily - Data range: from May 27, 2020, to Feb 28, 2021, performed on Feb 28, 2021, at 6:30 pm GMT. Please note: Past performance is not a reliable indicator of future results. 

 

Past five-year performance of the S&P 500: 2020 = +16.17%, 2019 = +29.09%, 2018 = -5.96%, 2017 = +19.08%, 2016 = +8.80%, 2015 = -0.82%.

In the daily chart above of the S&P 500 stock market index, the uptrend still remains intact with the 20-period (blue), 50-period (red) and 100-period (green) exponential moving average still moving higher.

Now that we are finally back at the 50-day moving average, some traders may look for clues on whether buyers are likely to step in here or a bit further below at the 100-day moving average where the price bounced significantly in September and October 2020.  

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