• US employment report is expected to steal the show during today’s session
  • UK construction PMI among the most important readings before noon
  • Oil rigs count might be the crucial data for oil prices at the end of the week

As every first Friday in a month all eyes are on the US jobs report which might inject life to the greenback, which in turn has underperformed recently. On top of that, British pound traders will get a construction PMI reading which might be another reason to continue buying the quid. At the end of the day there will be a weekly change in US oil rigs, the data appears to be yet more relevant given where oil prices are hovering right now.

9:30 am BST – UK construction PMI: Admittedly, the yesterday’s manufacturing PMI turned out to be sub-par, it did not change the outlook for the British currency at all. The pound has been driven predominantly by weakness in the US dollar so once the greenback regains its appeal at least to some extent a more severe pullback in the pound could be experienced. The consensus points to 52 suggesting a tiny decrease from 52.2 seen in December.

1:30 pm BST – US payrolls: At the beginning of the week there were some hopes that the US dollar could have gained momentum as a slew of macroeconomic readings were expected (including Federal Reserve meeting). However, after several days one may sum up that it has yet to materialise but today’s NFP report might be the last chance for the USD. Let us point out that while the EURUSD is trading right now above a 1.25 handle, the US currency seems to be stronger against such currencies as AUD, NZD or JPY. All of that means that the greenback is actually reviving but the common currency remains intact at the same time. Taking into account the whole week the greenback has gained over 1% against JPY and AUD thus far and it’s lost the most against CHF, GBP and EUR respectively. Given the strong reading of ADP (234k compared to 180k expected) one may say that the consensus ahead of the NFP (180k) looks somewhat cautious but keep in mind that January featured severe winter which could have put a dent in employment to some extent. Apart from it, average hourly earnings are expected to build to 2.6% from 2.5% in a year-over-year basis whereas the jobless rate should stay at 4.1%.

6:00 pm BST – US oil rigs: The last week saw a hefty increase in oil rigs count as US drillers are getting more eager to add fresh rigs on the back of a continued rise in the commodity price. Having regard to fragility of the ongoing rally one may suspect that each healthier build in rigs (along with rising production and stocks) could be a reason to cash in on longs. Finally, take a look at the chart above to see WTI prices are hovering just a notch below their crucial long-term resistance.

Central bank speakers scheduled for today:

  • 10:00 am BST – ECB’s Coeure
  • 6:30 pm BST – FED’s Kaplan
  • 8:30 pm BST – FED’s Williams

link do file download linkWTI prices are trading a touch below an important resistance being underpinned by a 50% retracement of the big swing begun from mid-2014. Source: xStation5