The main event of the day is August’s NFP for the US, dropping at 12:30 GMT, with market forecasts calling for a print of 191K jobs added in August, compared to the previous month’s 157K, but all eyes will be on the wage growth. The market anticipates an interest rate hike by the U.S. Federal Reserve in September and a strong inflationary data point would validate that view. The ADP released yesterday came lower than forecasted, with private payrolls went up by 163,000 instead of 195,000. An additional $200 billion in US tariffs on Chinese products could go live on Friday as the public comment period ended at 07:00 GMT. The tariffs could go into effect shortly afterward, though there was no clear timetable.
USD/JPY has been in the hands of the bears ahead of the key data event on Friday, while EUR/USD rose to a high of 1.1659 yesterday, possibly on the back of a drop in the 10-year Italy-German yield differential. That said, a big rally could be in the offing if the US average weekly earnings and non-farm payrolls figure for August misses estimate by a wide margin. The GBP/USD is heading into this dense Friday trading tightly just above the 1.2900 handle, and traders will be bracing for a London market session that will be seeing potential knock-on volatility from a top-tier GDP reading for the European Union, the UK’s closest neighbour.
Oil prices fell on Friday after data from the EIA showed inventories of U.S. crude fell by 4.302 million barrels for the week ended Aug. 31, beating expectations for a draw of 1.294 million barrels. Crude Oil WTI Futures for October delivery was down to $67.75 a barrel, while Brent Oil Futures for November delivery slipped to $76.42. The upcoming U.S. sanctions on Iran would continue to affect outlook of oil prices this year, according to analysts.
Gold prices rose on Friday morning in Asia as the U.S. dollar slipped against Japanese yen amid fears that Washington would turn its attention on trade issues with Tokyo, after it slapped tariffs on Chinese products in late August and with the potential of further tariffs hanging in the balance. Gold prices climbed to $1,207.5 per troy ounce as U.S. President Donald Trump told that he is considering taking on trade issues with Japan. The news sparked concerns in markets and raised demand for the yellow precious metal, which is seen as a safe haven asset during turmoil.