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Daily Market Outlook By PYX Markets
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[QUOTE="PYX Markets London, post: 108990, member: 38730"] [b]Daily Market Outlook 2nd September [/b] [img]https://scontent-amt2-1.xx.fbcdn.net/v/t1.0-9/13938553_118457278597764_4706199327588223406_n.jpg?oh=4cb4000aa052d5b9cf8c6e211c4ac665&oe=581DD5BC[/img] Asian stock markets wobbled and the dollar was on the defensive on Friday as investors awaited U.S. job data later in the day which could give clues on whether the Federal Reserve will raise interest rates as soon as this month. The dollar, which was bullish much of the week, nursed losses after downbeat U.S. manufacturing data tempered recent optimism on the U.S. economy that had revived expectations for a near-term rate hike by the Fed. A report from the ISM on Thursday showed U.S. factory activity contracted for the first time in six months in August, as new orders and production tumbled. The ISM index was 49.4. Asian equity markets took few cues from overnight moves on Wall Street, where stocks were flat with gains in the tech sector offsetting sluggish U.S. factory activity data and lower oil prices. The markets will look to Friday's non-farm payrolls to see if the Fed can risk raising rates this month or later this year. Economists polled by Reuters expect the U.S. economy to have added about 180,000 jobs in August. The Fed lifted its benchmark overnight interest rate at the end of last year for the first time in nearly a decade, but has held it steady since amid concerns over persistently low inflation. The step-down in employment would come after the economy created a total of 547,000 jobs in June and July. With the labor market near full employment and the economy's recovery from the 2007-09 recession showing signs of aging, a slowdown in job growth is normal. Yellen has said the economy needs to create just under 100,000 jobs a month to keep up with population growth. There are, however, risks that August payrolls will undershoot expectations, given what some economists believe are challenges adjusting the data for shifts in school calendars. The greenback had surged against its peers following a relatively hawkish speech by Fed Chair Janet Yellen last Friday, which raised expectations the U.S. central bank was moving closer to a hike. Sterling inched up 0.1 percent to after jumping 1 percent overnight on purchasing managers' index (PMI) data showing the British manufacturing sector staged one of its sharpest rebounds on record in August. The post-Brexit surprise boosted the pound as it could prompt the Bank of England to rethink the need to cut interest rates again if other surveys confirm the trend. Japan's economic growth is expected to be revised down slightly to flat over April-June due to a decline in capital expenditure, a Reuters poll found, underscoring the view that any recovery in the current quarter will be modest. A preliminary estimate last month saw economic growth grind to a virtual halt in the second quarter, posting just 0.2 percent annualized growth as the strong yen and weak demand took their toll on exports and capital spending. The poll of 17 economists found the annualized growth rate of Japan's GDP was expected to be flat over April through June, slumping from 2.0 percent annualized expansion in the first quarter, a figure flattered by leap-year effects. This would translate into a quarter-on-quarter reading of 0.0 percent, unchanged from the initial estimate. Separate data from the finance ministry, out at the same time as the revised GDP figures, is likely to show Japan's current account balance posting a surplus of 2.090 trillion yen ($20.23 billion) in July. That would top June's 974.4 billion yen surplus and would be the 25th straight monthly surplus in the balance of payments, helped by income from overseas investments, foreign tourists, and the trade surplus. Crude prices rose on Friday after losses of more than 3 percent a day earlier, with investors treading cautiously ahead of key U.S. employment data that will help gauge the health of the world's largest economy and oil consumer. Though rising in this session, Brent and WTI are on track for their biggest weekly losses since mid-January, hit by oil inventory builds and weak U.S. manufacturing data "The end of the U.S. driving season and the prospect of building inventories create downward risk for the oil price and may see further pressure on energy stocks today." Investors are looking ahead to non-farm payroll data later in the day for a sense of the direction of the U.S. economy, with a strong reading seen boosting the chance of a Federal Reserve interest rate hike soon. A rate rise may strengthen the U.S. dollar, which could depress oil prices as it would make the greenback-denominated commodity more expensive for holders of other currencies. Friday's oil price gains may be capped by concerns of slowing global economic growth. There is also increasing scepticism among traders that the OPEC and other producers such as Russia will agree to freeze production at a meeting in Algeria later this month. However, lending credence to a freeze, Saudi Arabia, the world's biggest crude exporter, has appeared to change its stance and is likely to support production stabilization at the gathering. Further clouding the issue, Russian Energy Minister Alexander Novak on Friday played down the potential for talks on a possible output freeze. Additionally, more U.S. supply will return to the market as some producers in the eastern parts of the Gulf of Mexico are restarting operations with Hurricane Hermine is set to make landfall. Manufacturing activity in parts of Asia, which accounts for most of the world's oil demand growth, has also slowed. [/QUOTE]
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