(04 October 2019 ) DAILY MARKET BRIEF 1:NFPs Day: Will It Be The Final Nail In The Coffin? - Market News - 4 October 2019


After a more than disappointing reading in ISM manufacturing last Tuesday (47.8 versus 50 median forecast and 49.1 in August), the
non-manufacturing gauge received more attention than ever yesterday as market participants struggle to whether the US economy is heading
towards a recession. All economists surveyed by Bloomberg have been caught off guard as the most pessimistic ones expected the
non-manufacturing PMI to slide to 53.8 at most, while the gauge actually dropped to 52.6, down from 56.4 in August and well below median
forecast of 55. Without surprise, the equity market responded negatively to the news with global indices quickly moving into negative
territory. Front month future contracts on the S&P 500 fell as low as 2,855 points, down 1% on the session, while across the Atlantic the
EuroSTOXX 50 gave up 0.75% to 3,372. However, both indices trimmed losses within hours, suggesting that market participants are already
looking forward to today’s NFPs.

Indeed, a disappointing September job report would heightened fear of a US recession, which would inevitably trigger another equity
sell-off and a bond rally. In case of bad news, gold is also expected to extend gains as investors seek shelter. Nonfarm payrolls are expected
to come in at 145k, up from 130k in August, while the unemployment rate should have remained stable at 3.7%. In our opinion, there is a strong
probability that the payrolls would miss expectations as the market has underestimated the negative effect of the lingering trade
conflicts. The trade uncertainty is holding back investment decision, which ultimately translate into slower employment gains. On a more
positive note, US and China are set to meet next. This should help investors seeing the glass as half-full even in the case of a disappointing
NFP surprise.

By Arnaud Masset



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(04 October 2019 ) DAILY MARKET BRIEF 1:NFPs Day: Will It Be The Final Nail In The Coffin? - Market News - 4 October 2019
(04 October 2019 ) DAILY MARKET BRIEF 1:NFPs Day: Will It Be The Final Nail In The Coffin? - Market News - 4 October 2019
(04 October 2019 ) DAILY MARKET BRIEF 1:NFPs Day: Will It Be The Final Nail In The Coffin? - Market News - 4 October 2019
(04 October 2019 ) DAILY MARKET BRIEF 1:NFPs Day: Will It Be The Final Nail In The Coffin? - Market News - 4 October 2019
(04 October 2019 ) DAILY MARKET BRIEF 1:NFPs Day: Will It Be The Final Nail In The Coffin? - Market News - 4 October 2019

(04 October 2019 ) DAILY MARKET BRIEF 1:NFPs Day: Will It Be The Final Nail In The Coffin? - Market News - 4 October 2019

(04 October 2019 ) DAILY MARKET BRIEF 1:NFPs Day: Will It Be The Final Nail In The Coffin? - Market News - 4 October 2019