- Markets went into ‘risk off’ mode overnight ahead of the eagerly anticipated Non-farm Payroll report on Friday. Equity markets fell and the price of oil continued to fall as tensions in Ukraine/Russia and the Middle East kept helped to keep risk takers on the sidelines. The US ISM data was the highlight for yesterday with the manufacturing report coming out at 47.2, a slight improvement from last month’s 46.8 and a touch below expectations. The manufacturing sector clearly remains in the doldrums; however, analysts do not believe that the poor performance is currently sufficient to drag the economy into a recession. Employment data scheduled over the next three days will likely shape the Fed’s upcoming monetary decision and the data dump kicks off with the JOLTs job openings today along with the release of the Fed’s Beige Book this evening.
- EURUSD appears to be going nowhere fast, consolidating in the mid 1.10’s after dropping from last week’s highs. 1.0990 is decent support on the downside and the pair is likely to be rangebound ahead of Friday’s payrolls.
- GBPUSD is holding up well, trading around 1.31 after running out of steam after its Jackson Hole rally. Cable is unlikely to react significantly to today’s Services PMI report which is expected to come in unchanged at 53.3.
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