CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Risk off as traders eye beaten down expectations for non farm payrolls tomorrow

Article By: ,  Financial Analyst
June 2, 2011 12:18 PM

Risk off as traders eye beaten down expectations for Non Farm Payrolls tomorrow
Joshua Raymond, Market Strategist, City Index commented:

“Traders sold out of risky asset classes today, continuing a theme from yesterday’s session after much weaker-than-expected US economic data raised concerns that Friday’s non-farm payrolls could badly underperform.

From 3pm yesterday afternoon, the FTSE 100 Index has lost 100 points. Though in truth, the 100-point fall came within the final hour of yesterday’s session and the start to today’s one. Since the initial sharp fall, the FTSE 100 has moved a mere 15 points within a tight trading range, emphasising the lack of vigour any buy side activity has seen despite the fall in prices.

A potential silver lining to the jobs report however could be that now with expectations fairly low, a strong number could ignite a relief rally for stocks and finish European indices on a high for the week.

Sector wise it is the traditional riskier stock sectors that have borne the brunt of today’s risk aversion; the miners and oil firms. Both sectors have fallen over 1% in trading and are the key drag on the UK Index. Fast behind them are UK banking stocks, with Lloyds Banking Group one of the heaviest fallers on the day.

Tobacco stocks, a typical defensive sector, however outperformed the FTSE’s fall, with the sector remaining flat on the day whilst travel and leisure firms gained, benefitting from the fall in crude oil prices over the last 24 hours.

Non-farm payroll estimates revised lower
Estimations for tomorrow’s non-farm payrolls have been revised down from 180k to 140k-150k after the sharply underperforming ADP employment change report on Wednesday. The ADP employment report was the worst reading since September last year. Should non-farm payrolls follow this trend there could be a real disappointment in the figures and this may serve to caution that US economic activity is slowing. Traders don’t always pay too much attention to the ADP report, though with several US economic indicators disappointing of late, traders are seeing this report as a potential ‘shot across their bow’ for tomorrow’s labour data.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024