US NFP Report In Focus, Oil Prices Surge
The US Nonfarm Payrolls September report will be the news update that most economists will be waiting for the rest of this week. The NFP report that reflects the state of the labour market will be added to the talk regarding interest rates and the Federal Reserve’s plans to adjust its monetary policy.
Oil prices rose as traders feared the impact of escalating Middle East tensions. Brent crude futures gained 1.9% to $74.99 per barrel while WTI futures rose by 2.2% to $71.4 per barrel.
Table of Contents
US Nonfarm Payrolls September 2024 Report
On Friday, the US Nonfarm Payrolls (NFP) report for September is expected to draw the attention of investors and traders. Market analysts forecast that the NFP could reach 145,000, rising from the 142,000-figure recorded in August. The NFP report is taken into consideration by the US Federal Reserve as it reveals how the labour market has performed during the previous month.
However, ING’s economists suggested the figure could be much lower as they noted in the report released on September 30th. “Our economist expects a softer payroll read (115k) relative to consensus (146k) and also an increase in the unemployment rate to 4.3% against expectations for a flattening at 4.2%. The greater focus of the Federal Reserve on the employment side of its mandate means high sensitivity of the market to the details of the release. If we are right with our call for a tick higher in unemployment, expect a softer dollar as markets stick to expectations for a half-point Fed cut in either November or December,” was noted in the report.
The JOLTS report released by the Labour Department's Job Openings and Labor Turnover Survey showed that U.S. job openings unexpectedly increased in August after two straight monthly decreases. Barclays analysts told Reuters that “JOLTS estimates will be regarded as encouraging evidence that labor demand is stabilizing, implying that further increases in the unemployment rate are likely to be limited.”
Eurozone Inflation Drops To 1.8%
A Eurostat report showed that headline inflation in the eurozone fell to 1.8% in September on an annualised basis. This was the lowest figure recorded since April 2021, bringing inflation down to below the European Central Bank’s (ECB) 2% target. Core inflation came in at 2.7%, 0.1% lower than August’s figure.
On Monday, the ECB’s head Christine Lagarde had noted that “the latest developments strengthen our confidence that inflation will return to target in a timely manner.” As inflation seems to be hovering around the ECB’s target, analysts suggest that the ECB’s policymakers might consider a reduction of interest rates in the upcoming meeting.
Economists Fear Fed Policy Mistake
A survey by the National Association for Business Economics (NABE) revealed that 39% of economists polled believe that a monetary policy mistake “as the "greatest downside risk to the U.S. economy over the next 12 months." The US presidential elections and the clashes in the Middle East and Ukraine rank lower than the Fed’s policy as potential factors of economic disruption.
One out of two respondents said that the US economy is likely to perform worse than expected with economic growth decelerating to 1.8% in 2025, the unemployment rate increasing to 4.4% and inflation hovering around 2.1%.
Test Your Trading Strategies on an Admirals Risk-Free Demo Account
Are you interested in practising trading without risking your funds? A demo trading account from Admirals allows you to do just that, whilst trading in realistic market conditions. Click the banner below to open a demo account today:
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.
