Weekly Market Outlook: US Employment news in focus

März 29, 2021 11:00

As we head into the Easter weekend, all eyes turn to the US Non-Farm Payroll numbers on Friday afternoon. Traders have been driving the US dollar higher in recent weeks as speculation mounts the Fed will be forced to increase interest rates sooner rather than later. 

The rising US dollar has affected commodity currencies the most with the Australian dollar and New Zealand dollar down heavily last week. Wednesday’s US ISM Manufacturing PMI data may also set the tone mid-week. 

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 Employment 

On Friday 2 April, the Bureau of Labor Statistics in the United States releases three key economic figures that are widely watched by traders all over the world. 

  • 1.30pm BST = Non-Farm Employment Change
  • 1.30pm BST = Average Hourly Earnings m/m
  • 1.30pm BST = Unemployment Rate

The health of an economy is mostly judged by its level of employment. As the US economy is the largest in the world, the figures impact global markets. It’s even more important now because the expectation of an improving US economy is much higher than before. 

This is because the economy has been performing much better. But also because of the additional $1.9 trillion stimulus plan and an accelerated coronavirus vaccine programme. 

The market is expecting more than 400,000 new jobs to have been added to the economy last month, with a lower unemployment rate. 

Source: Admirals MetaTrader 5, USDX, Monthly - Data range: from Nov 1, 2004, to Mar 26, 2021. Performed on Mar 26, 2021, at 7:00 pm GMT. Please note: Past performance is not a reliable indicator of future results. 

 

The long-term, monthly price chart of the US dollar index above shows the range that developed between the two black horizontal lines at ~$103.00 and ~$89.00. Recently, the price has rejected the lower support level and pushed the US dollar higher across the board. 

This has caused weakness in the EURUSD, AUDUSD, NZDUSD and GBPUSD but all to varying degrees. The commodity currencies have been affected the most by a rising US dollar and last week was no exception. 

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Corporate Trading Updates and Stock Indices

Global stock markets started last week trending lower before turning higher towards the end of the week. Most stock market indices closed higher for the week. However, investors are more focused on individual sectors causing global indices - which are made of stocks from a variety of different sectors - to lack momentum. 

This could change this week with big news announcements from the US. However, the bullishness in European stock markets has been impressive given the third lockdown and coronavirus vaccine supply issues. 

This highlights the underlying strength in some of these markets from institutional investors and could be ones to watch.  

Source: Admiral Markets MetaTrader 5, SP500, Daily - Data range: from Jul 10, 2020, to Mar 26, 2021, performed on Mar 26, 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%.

The chart above shows the daily price activity of the S&P 500 stock market index. The 20-period (blue), 50-period (red) and 100-period (green) exponential moving averages are all moving higher confirming the upward trend. 

Price has most recently bounced from the 50-period moving average and could be a price level for buyers to build upon. 

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