Tuesday, September 1, 2015

Markets in wait and see mode ahead of ECB and Non-Farm Payrolls | Three reports today will set the tone

After the fireworks of last week and most of the previous one, the first two days of this week have been characterised by choppy, sideways trading, with low volatility. Monday, of course, was also the last day of August while yesterday marked the first trading day of the new month of September. These days are always occasions when it is likely that institutions will be adjusting positions for reporting and other reasons.

But there are two other events that this week that might have convinced market participants to sit quietly and await the outcomes. The first of these occurs tomorrow, when the European Central Bank (ECB) under Mario Draghi will release its first monetary policy statement of the post-summer season. There will, as usual, be a press conference afterwards. Then, on Friday, we have the US Non-Farm Payrolls report, which is always closely watched and reacted to.

Three reports today will set the tone

There are three reports due for release today that will give some forward guidance to the market in regard to the matters that are of concern to all. These are the Eurozone Producer Price Index (PPI) which, while not normally as impactful as the Consumer Price Index (CPI), will nevertheless have something to say about the all-important question of inflation, or the lack of it, in the region where the Single Currency is used. Later, the US private payroll company, ADP, will release its estimate of the jobs situation in the preceding month, which always attempts to anticipate the official US Non-Farm Payrolls two days later. Lastly, US Factory orders at 15:00 GMT+1, will indicate the totality of orders for both durable and non-durable goods in the United States.  

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