Global macro overview for 05/01/2018

As usual, on Thursday, a weekly report from the labor market was published in the USA. It turned out that 250,000 new applications for unemployment benefits were made (240,000 expected). The average of four weeks for these data increased to 254,000. There was also an ADP report on the change of employment in December in the private sector (the sector created 250,000 jobs, while the market participants expected 190,000). The correlation with the official report is small these days, so he reactions were very suppressed and rather limited to the currency market. This is a good prognosis for the governmental NFP Payrolls report, even if the data does not have a direct link. Nevertheless, the lack of a stronger USD response after the publication of ADP clearly indicates that the issue of wage growth is crucial for the global investors. So far, the verdict about the outcome of today's NFP report based on the available information is fruitless. The ISM Manufacturing index increased stronger to forecasts to 59.7 from 58.2, which is a proof of the condition of the sector. Although the sub-index of employment in the ISM report declined in December to the level of 57, it still indicates the willingness of companies to dynamically expand the employee base.

Let us now take a look at the US Dollar Index technical picture on the H4 time frame before the US job market data is published. The market got back to the consolidation zone within the range of 91.75-92.28 after a failure to rally higher towards the technical resistance at the level of 92.49. Only a sustained breakout above this level will change the current outlook to more bullish.


The material has been provided by InstaForex Company -