US open Futures pare gains on disappointing ADP data

US futures

Dow futures +0.1% at 31397

S&P futures -0.1% at 3865

Nasdaq futures +0.1% at 13085

In Europe

FTSE +0.4% at 6638

Dax +0.2% at 14076

Euro Stoxx +0.1% at 3713

Learn more about trading indices

US economy to reopen earlier on vaccine drive

News announced by President Joe Biden that the US will have enough vaccine doses for all American adults by May is lifting is lifting risk appetite. A deal between Johnson & Johnson and Merck has been agreed and this will substantially expand J&J’s covid vaccine manufacturing capacity.

All American adults could now be vaccinated two months earlier than the initially planned for July date. Consequently, the US economy will be able to reopen sooner than initially expected.

In another sign of the improving picture in the US, Texas has ended covid restrictions on businesses as the infection rate dropped substantially.

US Private Payroll’s disappoint

The ADP private payroll report revealed that companies added fewer than expected payrolls in February. Private payrolls rose by 117K versus 177k expected and down from the upwardly revised 195k in January. This steep miss highlights the ongoing struggles that businesses are facing amid the pandemic and doesn’t bode well for Friday’s non-farm payroll report and has sent futures lower ahead of the open.

Australia Q4 GDP beats forecasts

Australian reported a better than expected 3.1% GDP growth in Q4, well ahead of the 2.5% expected as consumer spending and iron ore prices surged. The upbeat data comes despite an ongoing and widening dispute with China its largest trading partner.

Consumer spending surged 4.3%quarter on quarter as households splashed the cash that they had saved across lockdown quarters.

A similar phenomenon is expected in other countries when covid restrictions are lifted.

Stocks to open higher

The upbeat outlook for the economy has seen demand for riskier assets such as stocks rise. US futures point to a stronger start.

As earning season winds down there are reports due from Marvell, Dollar Tree.

Lyft

Lyft trades +4.5% ore-market after the ride hailing company raised its outlook amid a quick than expected return of demand. The week ending 28^thFeb was the company’s best week since March last year.

FX – GBP flat mid Budget

GBP is trading flat after the Chancellor announced the extension of the furlough scheme until September but also announced plans to raise corporation tax to 25% from its current 19% in 2023 with an exemption for smaller businesses. The OBR forecasts showed that the UK economy would bounce back quicker than forecast.

Analyst Fiona Cincotta looks at EUR/GBP price action and levels to watch here.

GBP/USD trades +0.04% at 1.3958

EUR/USD trades -0.3% at 1.2050

Oil resumes uptrend

After a steep drop at the start of the week oil prices have jumped back over $60 ahead of tomorrow’s OPEC meeting. Reports that several OPEC+ members are in favour of keeping output levels unchanged boosted the price.

Oil had sold off steeply at the start of the week on expectations that production cuts would be eased and more oil released back into the markets.

The market has broadly shrugged off US API stock pile data which showed a surprise rise in US crude inventories.

US crude trades +1.15% at $60.20

Brent trades +1.02% at $63.70

Learn more about trading oil here.

The complete guide to trading oil markets

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.