Tonight’s US non-farm payrolls report puts the dollar under the spotlight. A much weaker-than-expected private sector employment report by ADP released earlier this week has led to a significant decline in the US dollar index, and traders are watching tonight’s number for clues of economic health.

The market expects some 180k new jobs added last month but trade uncertainties and persisting weakness in the manufacturing sector might weigh on the jobs reading. 

The ADP report suggested only 67k jobs were added in the private sector last month, falling short of a forecast of 156k. The weakness mainly came through from small business with goods-producing sectors such as manufacturing, construction and mining among the weakest spot.

As the dollar fell this week on poor US manufacturing and private payroll reports, GBP/USD surged to a seven-month high and EUR/USD climbed to a one-month high. Tonight’s non-farm payrolls could add more volatility to the forex market, with a much lower reading pointing to further downside of the dollar.

US equity market climbed marginally on Thursday night as investors are cautiously optimistic about the outcome of the US-China trade talk. Both sides have economic intentions to strike a deal to avoid the 15 December tariffs deadline as the global economy has already been adversely hurt by trade uncertainties.

Opec+ is holding an oil meeting in Vienna today in which an additional 0.4 million bpd output cut will be discussed. A further extension of the current 1.2 million bpd cut beyond March 2020 is widely expected. Technically, Brent is facing strong resistance at around US$ 64.4 (50% Fibonacci Retracement), and the next major resistance will be US$ 66.2 (61.8% Fibonacci Retracement).

Singapore’s STI has opened mildly higher at 3,180 points. Hope for Opec cut and higher crude oil prices helped to boost sentiment among the local offshore & marine sector. REITs and real estate sector also rebounded decently, suggesting that a bargain hunting is perhaps back after a month-long selloff.

Non-farm payrolls chart data

 

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