Trump quarantine to keep the market on edge ahead of the US jobs report


It is non-farm payrolls Friday but the market is showing some signs of caution in the build-up as we see news of Trump going into quarantine while waiting on his coronavirus test result, after his close aide, Hope Hicks, tested positive for the virus.

That has seen US futures fall while the dollar and Treasuries are keeping slightly higher on the day as a result. The greenback is maintaining a modest advance across the board but there is little change to the technical picture ahead of European trading.

EUR/USD is trading near the lows at 1.1719 but with large option expiries sandwiching the pair at 1.1700 and 1.1750, there might be little scope to move before we get to the US non-farm payrolls report later on in the day.

Looking ahead, Eurozone CPI for September is the only notable release in the session ahead but it should do little to distract from the focus ahead of the US jobs report.

As such, it may be a relatively quiet one but headline risks are aplenty as we will have to watch out for the conclusion of Brexit talks, as well as news from the US on Trump's health status and more talks on the economic relief package.

0900 GMT - Eurozone September preliminary CPI figures

Prior release can be found here. Euro area annual CPI is expected to keep in deflation territory once again this month, though there might be a slight downside skew to the expected -0.2% y/y reading. Inflation pressures have been largely subdued with the core reading also expected to remain at its lowest on record last month. The ECB hasn't shown signs of buckling under the pressure just yet, but more readings like this moving forward will only serve to test their tolerance as we look towards the year-end.

That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.