Marginal losses were seen in US equities as the major indexes closed in the red as we see traders adopt a cautious tone in light of the upcoming data. The DJIA lost 0.14%, the Nasdaq 100 lost 0.17% while the S&P 500 lost 0.29%. In Asia, equity markets traded mixed with the Nikkei 225 losing 0.5% while the ASX 200 remained unchanged.
In FX, the USD remained fairly neutral as the US Index squeezed gently higher thanks to the continues weakening of the GBP. The GBPUSD was hammered lower, breaking below 1.2200 and making lows of 1.2165 before some light profit taking took the pair above 1.2200 overnight. The overnight respite was short-lived as we saw bears re-enter, looking to test yesterday’s lows, taking the weekly loss for the GBPUSD to over 100 pips. The USDJPY managed to fight off initial bearishness as we see a worse than expected Final GDP figure begin to filter through and weaken the JPY, placing the 114.00 resistance level back in play.
In commodities, crude oil continues to trade in the 51 to 55 USD per barrel range for the 4th consecutive month as market forces appear to be in equilibrium and neither buyers or seller having enough cause to break the range. Today US Crude Oil Inventories could change this, with a higher than expected release likely to see the lower end of the range tested while a lower than expected release will likely see the higher end of the range tested. Gold continues to be sold off as traders prepare for next week’s potential rate hike as the relatively overvalued metal, in relation to the USD, adapts to the current environment. Bears will look to test the 1200 level before Fridays NFP data while bulls will hope to retest 1250 by then.
Today’s major news release come from the US in the Form of the ADP Non-Farm Employment change which is a prelude to Fridays main event. A better than expected print will likely see the USD move higher with gold and equities falling as market participants further price in a March lift off while a worse than expected release will result in the opposite with the USD falling and gold and equities climbing as market participant price in a decreased probability of a rate hike.