Risk appetite evident in global equities during the Asian session, following Friday’s strong NY close. Evidently, the poor NFP print pushed back rate hike expectations even further, allowing asset markets to float higher as the USD gets offered.
In my experience, post-NFP Mondays are usually dull but today will be an exception. Of the spotlight pairs from the watchlist, Gbp has important data out this morning (Services PMI) and thus the Gbp complex is worth watching. We’re mostly data-dependant on the Sterling now…the market may be too bearish on Gbp whereas recent data has been better. In fact, the market is expecting 56.0 vs 55.6 prior. On the charts, above last week’s high (5240) longs would most likely be in control. Vice versa, only sub-5170s would shorts come back to life.
There is also Euro data this morning, but the most important piece of data today will likely be the US ISM Non-Manufacturing PMI, expected worse at 57.7 vs 59 prior. As noted yesterday, I’d prefer to play Usd weakness via NzdUsd longs, or USD strength maybe via Gbp (depending also on Gbp data).
Charts from the Game Plan:
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