Global markets have been steady overnight awaiting today's big employment reports. U.S. index futures, the DAX and the Hang Seng are all up about 0.1%, while the Nikkei fell 0.4%.
In currency markets, USD has slipped a bit, possibly over the creation of a Grand Jury ramping up special prosecutor Robert Muller's inquiry into Russia increasing political uncertainty in the U.S. and adding to the long laundry list of situations simmering away that could flare up into something big at any time.
The euro is also getting a boost today from better than expected German factory orders and Italian retail sales. GBP has stabilized at a lower level from Thursday's takedown. CAD has rebounded slightly ahead of today's Canada jobs and Ivey PMI reports.
Employment figures for the U.S. and Canada could have a significant impact on trading heading toward the weekend, particularly in USD and CAD. Nonfarm payrolls are expected by the street to drop back to 180K, from 229K last month. ADP payrolls came in below expectations at 178K but the shortfall was more than accounted for by an upward revision to last month. This is important because last month ADP payrolls originally reports at 158K were way below nonfarm. The employment component of the ISM manufacturing report slipped a bit but was in line with its long-term average. Based on all of this, I am thinking we could see 200K for nonfarm this month, including a 10K downward revision.
For Canada, it would not be a surprise to see a slowing in job growth after two spectacular months in a row, including a 45K increase last month. Since the last employment report, retail sales, manufacturing sales and new home sales have all come in above expectations, indicating a robust economy, further supported by the Bank of Canada easing back on stimulus and raising interest rates. The street is expecting 10K but has been overly pessimistic all year. I am thinking 25K.
Friday also brings trade figures for the U.S. and Canada, which could attract political attention heading toward NAFTA renegotiations later this month. The Baker Hughes weekly drill rig count could attract attention, particularly from oil and energy stock traders. During this earnings season, Halliburton (NYSE:HAL) indicated oilfield service demand was slowing and a number of U.S. energy producers cut their capital expense budgets. The number of active drill rigs has steadily climbed through July, but signs of a downturn could spark renewed interest in WTI.