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Here are the latest developments in global markets:

FOREX: Ahead of the all-important Nonfarm payrolls the dollar index, which gauges the greenback’s strength versus six major currencies hit a fresh two-week high of 95.36 early on Friday before it fell back to 95.24 (+0.08%). Dollar/yen was trading 0.05% higher on the day around 111.70, and is set to complete a green day after two consecutive negative sessions. Turning to the euro area, retail sales grew less than expected in June and July’s final services PMI readings also missed forecasts, sending euro/dollar lower to a new five-week low of 1.1558 before the pair edged up to 1.1575(-0.07%). Pound/dollar was also trading weak around the 1.30 key-level (-0.14%), weighed by dovish Brexit remarks from the BoE chief, Mark Carney. Disappointing UK Services PMI figures also added to the bearish sentiment. The antipodean currencies were mixed with aussie/dollar rising by 0.04% and kiwi/dollar falling by 0.31%. Moreover, dollar/loonie stood near its opening level, while dollar/yuan hit a fresh 14-month high as heightened US-China trade tensions continued to drag the yuan lower.

STOCKS: European stocks were trading higher on Friday at 1030 GMT, erasing losses of the previous two days. The pan-European STOXX 600 and the blue-chip Euro STOXX 50 were up by 0.60% and 0.52% respectively. The German DAX 30 climbed by 0.52%, the British FTSE 100 jumped by 0.69% while the French CAC 40 rose by 0.37%. The Italian FTSE MIB advanced by 0.61%. In the US, futures tracking stock indices were in the red, pointing to a negative open.

COMMODITIES: Oil prices were moving lower, with West Texas Intermediate (WTI) crude oil and Brent crude being down by 0.26% and 0.29% at $68.75/barrel and $73.17/barrel respectively. In precious metals, gold inched up to $1207.93/ounce to trade near its opening level after it posted a fresh 1-year low of $1,204 earlier in the day.

Day ahead: US nonfarm payrolls take centre stage; trade developments eyed

US nonfarm payrolls will be the big release of the day (1230 GMT) and dollar traders will be once again eyeing wage growth readings for direction as higher earnings could boost inflationary pressures and thus the Fed’s rate outlook, subsequently pushing the dollar higher; the opposite holds true as well. According to analysts, average earnings are expected to increase by 0.3% in July on a monthly basis, faster than June’s pace of 0.2%. Year-on-year though, the measure is anticipated to grow by 2.7% as in the previous month. The unemployment rate will be in focus as well, with forecasts suggesting that the US labor market has tightened even further, with the jobless rate projected to inch down from 4.0% to 3.9%. Regarding the employment change, the number of workers in non-farm sectors is anticipated to have risen by 190k compared to 213k seen previously. Should the data prove better-than-expected, especially on the wage front, increasing the odds for two more rate hikes this year, the greenback could extend this week’s gains. Alternatively, a significant miss in data could send the currency down.

Staying in the US, June trade stats will be gathering attention at 1230 GMT amid the latest threats from the US to increase its import tariffs on Chinese goods; the relevant deficit is predicted to widen to $46.5 billion, from May’s $43.1bn. In May, rising exports drove the US international trade deficit to the lowest in 19 months, though, the trade gap with China widened further. Another deterioration in June could potentially add fuel to Trump’s protectionist mindset. Meanwhile, Canada is scheduled to deliver its respective trade report at the same time.

Later in the day (at 1400 GMT), the US’ ISM non-manufacturing PMI for the month of July is projected to decline by 0.5 points to 58.6.

In oil markets, Baker Hughes will report the number of active rigs for oil drilling at 1700 GMT.

In terms of policymakers’ appearances, the UK Prime Minister, Theresa May, will be meeting the French President, Emanuel Macron, in an attempt to persuade the French leader to soften his stance on her Brexit plans at a time when fears over a no-Brexit deal are heading higher; the BoE chief, Mark Carney, said earlier on Friday that the risks of such an outcome are “uncomfortably high”.

On Saturday at 0245 GMT, foreign ministers from the Association of Southeast Asian Nations (ASEAN) and other countries such as Australia, China, Japan, India, New Zealand, South Korea, Russia and the United States will be holding a summit, where defence matters and trade issues related to the US protectionist rhetoric could dominate the agenda. Earlier at 0100 GMT, the Federal Reserve Bank of New York Executive Vice President Simon Potter will be speaking on monetary policy implementation before the 23rd EMEAP (Executives’ Meeting of East Asia-Pacific Central Banks) Governors’ meeting.

Developments in US-Turkish relations could be of interest in the subsequent days as tensions have escalated after the US imposed sanctions on two Turkish ministers over the trial of Andrew Brunson, an American pastor; a move that sent the Turkish lira to fresh record lows against the greenback. On Friday, though, the US Secretary of State Mike Pompeo and the Turkish Minister of Foreign Affairs Mevlut Cavusoglu agreed to continue efforts to resolve the dispute.

It has been a rough trading week for financial markets as heightened trade tensions between the United States and China sapped global risk appetite.

The Trump administration's unpredictability on trade has clearly dealt a blow to sentiment and this continues to be reflected across global equity markets. Asian stocks concluded mixed this morning due to renewed trade worries encouraging investors to adopt a guarded approach. Although European equities have inched higher, the upside may be limited caution ahead of the release of the US jobs report for July.

Will July's US jobs report push the Dollar higher?

Dollar bulls were injected with fresh inspiration this week after the Federal Reserve's hawkish policy statement for August reinforced market expectations of higher US interest rates.

Today's key risk event for the Dollar will be the jobs report for July, which could offer fresh insight into the health of the labour markets. The US economy is expected to have created 193k jobs in July, with average earnings up by 0.3%, while unemployment is projected to remain steady at 4%.

While every piece of the US jobs report is highly important, there will be a strong focus on wage growth figures, as signs of accelerating wage growth may fuel speculation of inflationary pressures rising. Building inflationary pressures in the United States are likely to heighten speculation over the Federal Reserve adopting a more aggressive approach towards monetary policy normalization. With the Dollar heavily influenced by monetary policy speculation, expectations of higher US interest rates could translate to further upside.

Technical traders will continue to closely observe how the Dollar Index behaves above the 95.00 level. A solid weekly close above 95.00 could encourage an incline towards 95.50 and 96.10, respectively.

Commodity spotlight – Gold

A broadly stronger Dollar has offered nothing but pain and misery to Gold, which tumbled to a fresh yearly low below $1206 during Friday's trading session.

It is becoming quite clear that market expectations over higher US interest rates have dented appetite for the zero-yielding metal. Gold's pain could be intensified today, depending on how markets react to the US jobs report that will be released this afternoon. With the precious metal already heavily bruised, a strong jobs report may throw the knockout blow for prices to dip below $1200. From a technical standpoint, Gold remains under pressure on the daily charts. The downside momentum could send prices towards $1200 in the near term.

Friday August 3: Five things the markets are talking about

President Trump's unpredictability on trade is keeping capital markets on the back foot and a theme that is not expected to change anytime soon.

The 'big' dollar remains better bid ahead of this morning U.S jobs report (08:30 am EDT), supported mostly by the markets confusion surrounding the escalating Sino-U.S trade conflict.

Nevertheless, this morning's NFP report is forecasted to show a healthy labor market, with +193K new jobs and an unemployment rate of +3.9%. Many will focus on wage growth, a print of +2.8% could support another dollar leg up as the market prices out four rate increases this year.

The only thing that seems certain is that China will be expected to retaliate if President Trump follows through on a threat to increase tariffs to +25% from +10% on +$200B in Chinese imports.

Worries over protectionism has this week punished global stocks despite a stronger earnings season, supported lower sovereign yields and pushed G10 currency pairs to new weekly lows outright. The Chinese yuan is on track to complete an eighth week decline – its longest losing streak in 25-years.

Elsewhere, Turkish assets and lira remain under pressure after the U.S imposed sanctions on two government ministers over the detention of an evangelical pastor.

In commodities, oil prices have touched a new two-week low on U.S crude inventories supply concerns, while gold prices remains choppy.

1. Stocks close out the week mixed

In Japan overnight, the Nikkei managed to make a small gain partly due to a sharp rise in Suzuki motors (+8.6% on earnings). The Nikkei average ended +0.06% higher, while the broader Topix fell -0.54% to a three-week closing low on Sino-U.S trade tensions.

Down-under, Aussie shares closed out lower, pressured by the latest exchange of trade threats between the U.S and China, a major market for Australia's resources exports. At close of trade, the S&P/ASX 200 was -0.10% lower. In S. Korea, the Kospi was +0.77% higher.

In Hong Kong and China, stocks edged lower, dragged down by fears of slowing growth on the mainland, a vaccine scandal that weighed on healthcare shares and persistent worries over the Sino-U.S. trade war. The Hang Seng index fell -0.1%, while the China Enterprises Index lost -0.4%. In China at the close, the Shanghai Composite index was down -1%. For the week, the index lost -4.6%, its worst performance in five months, while the blue-chip CSI300 index was down -1.65%. It lost -5.9% for the week.

In Europe, regional bourses trade sideways despite misses in macro-data. Geopolitical concerns continue to be main theme, with concerns on trade and Brexit negotiation. Market focus turns to non-farm payrolls (NFP).

U.S stocks are set to open small down (-0.1%).

Indices: Stoxx50 +0.3% at 3,479, FTSE +0.4% at 7,609, DAX +0.4% at 12,601, CAC-40 +0.2% at 5,473; IBEX-35 +0.2% at 9,713, FTSE MIB +0.3% at 21,476, SMI -0.1% at 9,149, S&P 500 Futures -0.1%

2. Oil prices edge lower on long-term bearish factors, gold at a record low

Oil prices are down in early trading as the market re-focuses on the 'bearish' longer term factors following yesterday's rally on a report that U.S crude stocks in a key facility fell to their lowest in nearly four-years.

Brent crude futures are at +$73.15 per barrel, down -30c from yesterday's close, while U.S West Texas Intermediate (WTI) crude futures are at +$68.70 per barrel, down -26 cents from their close.

EIA data yesterday showed that inventories at the key Cushing storage hub in Oklahoma fell by -1.3M barrels, the lowest level in four-years.

However, overall U.S crude oil inventories actually rose by +3.8M barrels last week to +408.74M barrels.

Saudi Arabia, Russia, Kuwait and the U.A.E have increased production to help to compensate for an anticipated shortfall in Iranian crude supplies once planned U.S sanctions come into effect.

Note: Earlier today, China, Iran's biggest customer, has rejected a U.S request to cut imports from the OPEC member.

Ahead of the U.S open, gold prices have fallen to their lowest print in over a year amid a strong U.S dollar – another loss would be the fourth consecutive weekly. Spot gold is down -0.1% at +$1,206.05 an ounce. For the week, the yellow metal is down about -1.4%. U.S gold futures are -0.5% lower at +$1,214.10 an ounce.

3. Most sovereign yields fall

Turkish data this morning showed that domestic inflation has rallied to a 15-year high of +15.8% year-on-year last month. Numbers like this certainly strengthens the case for further interest rate hikes, however, the central bank faces pressure from the government not to do so.

In Italy, budget concerns have sent the 10-year BTP yields back above the +3.05% to a 10-week high, while lower down the curve, Italian two- and five-year BTP yields have backed up +22 to +25 bps to +1.27% and +2.32% respectively.

BoE's Governor Carney in an interview this morning stated that interest rates would not hit the +5% pre-crisis level for a long time. He reiterated that “one” rate hike per year could be seen as a rule of thumb and that the possibility of a no-deal Brexit was uncomfortably high.

The yield on U.S 10-year notes fell -1 bps to +2.98%. In Germany, the 10-year Bund yield fell -3 bps to +0.43%, while in the U.K the 10-year Gilt yield dipped -2 bps to +1.377%.

4. Dollar gets the green light

The 'big' dollar is maintaining a firm tone heading into the U.S open.

EUR/USD (€1.1572) has dipped to test new one-month lows as Italian bond yields backed up as Italy Finance Minister Tria holds a top-level budget meeting.

GBP (£1.2997) remains a notable underperformer among G10 currencies despite the fact that BoE officials yesterday 'unanimously' voted to hike +25 bps. The market is interpreting the BoE's decision as a “dovish” hike. Others are arguing that the BoE is heading towards a policy mistake amid heightened Brexit uncertainty.

TRY ($5.0783) managed to hit a fresh record low overnight ($5.1100+). However, slightly better Turkish CPI data helped to push the Lira off its record lows.

China's Yuan is poised for its longest weekly losing streak on record on continued concerns over a potential trade war. The CNY currency is heading for its eighth weekly decline with USD/CNY approaching the $6.90 area.

Note: CNY is off its worst levels overnight after a large Chinese bank was seen selling USD. It traded as low as ¥6.8965 before paring some of those losses to ¥6.8715.

5. U.K services PMI falls

Data this morning showed the purchasing managers' survey on U.K. services-sector activity falling to 53.5 in July, missing expectations for 54.7. This morning's miss reinforces market concerns about weakness in the British economy over Brexit uncertainty.

According to Markit, who compile the survey, “service providers commented that Brexit uncertainty had held back new project wins, reflecting risk aversion and a wait-and-see approach to investment spending among international clients.”

Notes/Observations

• Italian budget concerns send 10-year BTP yields back above the 3.05% to 10-week highs
• Brexit concerns trumps recent BOE rate hike
• Major European Services PMI disappoint (Beats: Italy; Misses: Euro Zone, Germany, France, Spain)
• Turkey’s July inflation accelerates less than expected

Asia:

• Japan plans sovereign wealth fund to finance US infrastructure
• Japan July Services PMI: 51.3 v 51.4 prior
• China July Caixin Services PMI hits a 4-month low (52.8 v 53.5e)
• Australia Jun Retail Sales MoM: 0.4% v 0.3%e, Q2 Retail Sales QoQ: 1.2% v 0.8%e
• Bank of Japan (BOJ) June 14-15th Policy Meeting Minutes (2 meetings ago): Many members pointed out that it was important to continue to conduct a multifaceted monitoring and assessment of the positive effects and side effects that could arise from the continuation of powerful monetary easing, including those on the functioning of financial intermediation and the financial system.

Europe:

• BOE Gov Carney: a few more rate hikes will be needed in the coming years; today's rate hike was the appropriate decision for the economy. One rate hike a year for next few years basically gets inflation back to target over the horizon; if people want a rule of thumb, they should use that
• EU's Barnier said not to soften the EU's strong opposition to PM May's Brexit plan (Note: There had has been speculation that German Chancellor Merkel was pushing for a “fudge”.

Americas:

• US Commerce Dept determines uncoated groundwood paper was being dumped on market by Canada and set final dumping duties at 16.8-22.2%
• Mexico Central Bank lefts its Overnight Rate unchanged at 7.75% (as expected) and would maintain its prudent policy stance going forward but still saw CPI risks biased to the upside

Economic Data:

• (IN) India July PMI Services: 54.2 v 52.6 prior (2nd month of expansion and highest since Oct 2016), PMI Composite: 54.1 v 53.3 prior
• (IE) Ireland July Services PMI: 57.4 v 59.5 prior (70th month of expansion), Composite PMI: 56.8 v 58.1 prior
• (RU) Russia July Services PMI: 52.8 v 53.0e ((30th month of expansion), PMI Composite: 51.7 v 52.0 prior
• (SE) Sweden July Services PMI: 59.1 v 59.8 prior
• (FR) France Jun YTD Budget Balance: -€58.9B v -€55.1B prior
• (HU) Hungary Jun Retail Sales Y/Y: 6.1% v 7.7% prior
• (TR) Turkey July CPI M/M: 0.6% v 1.0%e; Y/Y: 15.9% v 16.3%e; CPI Core Index Y/Y: 15.1% v 15.0%e
• (TR) Turkey July PPI M/M: 1.8% v 0.9%e; Y/Y: 25.0% v 23.8%e
• (CH) Swiss July CPI M/M: -0.2% v -0.3%e; Y/Y: 1.2% v 1.2%e
• (CH) Swiss July CPI EU Harmonized M/M: 0.4% v 0.0%e; Y/Y: 1.2% v 1.0%e
• (ES) Spain July Services PMI: 52.6 v 54.4e (56th month of expansion but lowest since Nov 2013), Composite PMI: 52.7 v 54.1e
• (ZA) South Africa July PMI (Whole Economy): 49.3 v 51.0e
• (CN) Weekly Shanghai copper inventories (SHFE): 192.8K v 197.1K tons prior
• (IT) Italy July Services PMI: 54.0 v 53.7e (25th month of expansion), Composite PMI: 53.0 v 53.4e
• (FR) France July Final Services PMI: 54.9 v 55.3e (confirmed its 25th month of expansion), Composite PMI: 54.4 v 54.5e
• (DE) Germany July Final Services PMI: 54.1 v 54.4e (confirmed it 61st month of expansion), Composite PMI: 55.0 v 55.2e
• (EU) Euro Zone July Final July Final Services PMI: 54.2 v 54.4e (confirmed its 61st month of expansion), Composite PMI: 54.3 v 54.3e
• (IT) Italy Jun Industrial Production M/M: 0.5% v 0.4%e; Y/Y: 1.7% v 2.2% prior; Industrial Production WDA Y/Y: 1.7% v 1.5%e
• (NO) Norway July Unemployment Rate: 2.5% v 2.4%e
• (RU) Russia Narrow Money Supply w/e July 27th:10.26 T v 10.35T prior
• (UK) July Services PMI: 53.5 v 54.7e, Composite PMI: 53.6 v 54.9e
• (EU) Euro Zone Jun Retail Sales M/M: 0.3% v 0.4%e; Y/Y: 1.2% v 1.4%e
• (IT) Italy Jun Retail Sales M/M: -0.2% v +0.1%e; Y/Y: 1.5% v 0.8% prior

Fixed Income Issuance:

• (IN) India sold total INR120B vs. INR120B indicated in 2020, 2026, 2031, 2033 and 2046 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx50 +0.3% at 3,479, FTSE +0.4% at 7,609, DAX +0.4% at 12,601, CAC-40 +0.2% at 5,473; IBEX-35 +0.2% at 9,713, FTSE MIB +0.3% at 21,476, SMI -0.1% at 9,149 , S&P 500 Futures -0.1%]
• Market Focal Points/Key Themes: European indices open slightly higher and traded largely in the trend as the session progressed despite misses in macro data; geopolitical concerns continue to be main theme, with concerns on trade and Brexit negotiation; materials stocks better performers; consumer discretionary most impacted; technology also supported after Apple tops $1T market cap; focus turning towards upcoming May-Macron meeting and Non-Farm Payroll release; earnings expected in the upcoming US session include Dish Networks, CenterPoint Energy and LyondellBasell

Equities

• Consumer discretionary: Dufry DUFN.CH -4.9% (results), International Consolidated Airlines IAG.UK -3.6% (results), Pets at Home PETS.UK +10.2% (results), Takeaway.com T5W.DE +4.5% (analyst action), William Hill WMH.UK -9.0% (results)
• Consumer staples: Safilo SFL.IT -8.0% (results)
• Healthcare: Fagron FAGR.BE -2.2% (results)
• Industrials: Gruppo Sias SIS.IT +2.4% (results)
• Financials: Banca Monte Paschi BMPS.IT -6.2% (results), Credit Agricole ACA.FR +2.1% (results), MedioBanca MB.IT +2.3% (results), Natixis KN.FR +1.9% (results), Royal Bank of Scotland RBS.UK +3.2% (results)
• Telcom: Proximus PROX.BE +1.9% (analyst action)

Speakers

• BOE Gov Carney in a BBC radio interview noted that interest rates would not hit the 5% pre-crisis level for a long time. Reiterated that one rate hike per year could be seen as a rule of thumb. Possibility of a no-deal Brexit was uncomfortably high; and such a situation was highly undesirable
• Italy Interior Min Salvini (also Dep PM): Next budget to include tax cuts and pension reforms
• Turkey Fin Min Albayrak Would see that Interest rates decline; risk premiums to fall in the period ahead. Central bank had proven right in its rate decision. The 1st target is to reduce inflation and then interest rates
• Turkey Foreign Min Cavusoglu stated that had a constructive meeting with US Sec of State Pompeo. Look to resolve issue by dialogue; agreed with US to continue working for solutions
• Poland Central Bank's Lon: Continued decline in PMI data could prompt a debate on non-standard policy tools
• US Sec of State Pompeo: Paster issue was one of many issues that US had with Turkey
• Indonesia Central Bank Gov stated that saw July core inflation rising due to seasonal factor but had not seen impact of IDR currency (Rupiah) depreciation on inflation yet
• China said to reject US request to cut Iran oil imports

Currencies

• USD was maintaining a firm tone during the session and again aided by potenial escalation on the trade front.
• EUR/USD dipped to test 1-month lows at 1.1560 area as Italian bond yields popped higher as Italy Fin Min Tria was holding a top-level meeting on the budget (PM Conte, Dep PM Salvini and Di Maio and EU Affiairs Min Savona involved). Salvini and Di Maio were said to be pushing Fin Min Tria's back to the wall on budget issues.
• GBP/USD tested below the 1.30 level for multi-week lows as Brexit comcerns seemed to trump the BOE rate hike. BOE Gov Carney continued to make the media rounds and noted that interest rates would not hit the 5% pre-crisis level for a long time. Carney added that the possibility of a no-deal Brexit was uncomfortably high but stressed the financial system would be ready for all outcomes on Brexit
• TRY currency (Lira) hit a fresh record low during the early part of today’s session as USD/TRY tested above 5.11 level. However, slightly better Turkish CPI data helped to push the Lira off its record lows (inflation accelerated less than expected)
• China's Yuan was poised for its longest weekly losing streak on record (since 1994) on continued concerns over a potential trade war. The CNY currency was headed for its eighth weekly decline with USD/CNY approaching the 6.90 area. The CNY was off its worst level in the session after a large Chinese bank was seen selling USD

Fixed Income

• Bund Futures trades at 161.85 up 45 ticks after Euro Zone, Germany and France Service PMIs all come in revised lower. A move back above 162.75 would target 163.47 then 163.63, with a move below 161.75 targeting 161.45 then 160.45.
• Gilt futures trades at 122.60 up 38 ticks after UK Services PMI comes in below expectations, with continuing upside targeting 123.18 then 124.44, with a move lower seeing initial support at 122.23 then 121.85.
• Friday 's liquidity report showed Thursday's excess liquidity rose from €1.906T to €1.907T. Use of the marginal lending facility rose from €254M to €276M.
• Corporate issuance saw 2 issuers raise $6.1B in the primary market

Looking Ahead

• 05:30 (IN) India to sell combined INR120B in 2020, 2026, 2031, 2033 and 2046 bonds
• 05:30 (ZA) South Africa to sell ZAR600M in I/ L 2029, 2033 and 2050 bonds
• 06:00 (IT) Italy Stats Agency (ISTAT) Monthly Economic Note
• 06:00 (UK) DMO to sell €5.0B in 1-month, 3-month and 6-month bills (£1.5B, £2.0B and £1.5B respectively)
• 06:45 (US) Daily Libor Fixing - 07:30 (IN) India Weekly Forex Reserves
• 08:00 (IN) India announces upcoming bill issuance (held on Wed)
• 08:15 (UK) Baltic Dry Bulk Index
• 08:30 (US) July Change in Nonfarm Payrolls: +193Ke v +213K prior, Private Payrolls: +190Ke v +202K prior, Manufacturing Payrolls: +25Ke v +36K prior
• 08:30 (US) July Unemployment Rate: 3.9%e v 4.0% prior, Underemployment Rate: No est v 7.8% prior, Civilian Labor Force Participation Rate: No et v 62.9% prior
• 08:30 (US) July Average Hourly Earnings M/M: 0.3%e v 0.2% prior; Y/Y: 2.7%e v 2.7% prior; Average Weekly Hours: 34.5e v 34.5 prior
• 08:30 (US) Jun Trade Balance: -$46.5Be v -$43.1B prior
• 08:30 (CA) Canada Jun Int'l Merchandise Trade (CAD): -2.3Be v -2.8B prior
• 09:00 (BR) Brazil July Services PMI: No est v 47 prior, PMI Composite: No est v 47 prior
• 09:00 (MX) Mexico July Consumer Confidence: 90.4e v 89.8 prior
• 09:45 (US) July Final Markit Services PMI: 56.2e v 56.2 prior, Composite PMI: No est v 55.9 prior
• 10:00 (US) July ISM Non-Manufacturing Composite: 58.6e v 59.1 prior
• 11:00 (EU) Possible sovereign ratings after EU close (Germany, Finland and Czech Sovereign Debt to be rated by Fitch; Israel Sovereign Debt to be rated by S&P
• 13:00 (US) Weekly Baker Hughes Rig Count data

WTI oil price holds within narrow consolidation on Friday, after strong rally previous day. Reports on unexpected fall in US crude supplies boosted oil price, temporarily offsetting negative impact from rising crude stocks and higher output from major oil producers. Thursday's rally retraced over 61.8% of $70.42/$66.91 bear-leg but failed to confirm bullish signal on close above cracked 55SMA ($68.98) and Fibo barrier at $69.08. However, daily techs improved on yesterday's rally, as momentum emerged from oversold territory and slow stochastic turned north, but MA's remain mixed and lacking to generate clearer direction signal. Bullish scenario requires close above $68.98/$69.08 pivots to signal further advance, which would confirm double-bottom on extension above $70.42 (30 July peak). Conversely, return and close below rising 10SMA ($68.13) would generate bearish signal and re-expose lows at $67.03/$66.91.

Res: 68.98, 69.08, 69.43, 70.00
Sup: 68.51, 68.13, 67.03, 66.91

The NFP with all accompanying data (Average Hourly Earnings and Unemployment Rate) will determine the next move on the USD/JPY, popular "Ninja". A this point we can see that the pair has been bought on dips but the negative result might tunrn the tables. 111.40-50 is the POC zone for buyers and the rejection from the zone will make a Bullish SHS pattern (inverted head and shoulders). However a drop below 111.20 will be a bearish sign with the pair targeting 110.75 and 110.40 below.

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

The Australian dollar moved higher from session low at 0.7348, consolidating fall from the session high at 0.7372, posted in Asia.

Upbeat Australian retail sales data provided little support to the pair, maintaining bearish bias, built in past two days fall.

Bearish daily techs favor further downside, with strong US jobs data, expected to further boost bears.

Near-term focus turns towards key supports at 0.7317/10 (20/02 July lows), with extended upticks to be capped under 0.7400 zone (converged 10/30SMA’s).

Res: 0.7373, 0.7389, 0.7400, 0.7429
Sup: 0.7348, 0.7322, 0.7317, 0.7310

EUR/USD

Current level - 1.1579

The bias is bearish, for a break through 1.1570, towards 1.1510 low. A violation of the latter will challenge 1.1300 zone. Initial resistance lies at 1.1600.

USD/JPY

Current level - 111.69

My outlook is bullish above 111.25, for a rise towards 112.75 area.

GBP/USD

Current level - 1.2990

The downtrend remains intact, for a tight test of 1.2960 low and a violation of the latter will signal a renewal of the general trend towards 1.2770 and 1.2570. Initial intraday resistance lies at 1.3080.

• Markets pare tariff-related losses;
• Another strong month of US job gains expected;
• Sterling steady after weaker PMI reading.

European equity markets are paring tariff-related losses at the end of the week, with indices around half a percent higher, while US futures look pretty flat ahead of the open on Wall Street and the closely watched jobs report.

Trade wars have once again proven a distraction for investors this week, one that started with a suggestion that the US and China were ready to engage in discussions but quickly turned sour again, as it was reported that the Trump administration is now proposing a 25% tariff on $200 billion of imports, up from 10%. This apparent escalation, intended to put further pressure on the world’s second largest economy, has instead only added fuel to the fire prompting China to respond with threats of retaliatory measures. Naturally, investors have become more risk averse in response.

Attention now turns to the US jobs report which is widely regarded as the most important economic release each month. The US has continued to create jobs at an extremely impressive rate despite unemployment being around the lowest it’s been in decades. While this, along with only modest wage growth, has triggered questions about just how much slack there really is in the economy – with a tight labour market typically being associated with higher wages – it is still impressive none-the-less and another strong month of employment gains is expected for July.

Around 190,000 jobs are believed to have been created last month, although after the ADP release on Wednesday – which does have a tendency to be a little off – even this may prove to be a little on the low side. As ever, investors will be more focused on wages because only once these start to grow will people consider the market to be tight, which could make the Federal Reserve a little nervous as it continues to raise interest rates at a steady pace.

The UK services sector experienced a somewhat mixed month in July with the index that represents more than three quarters of the economy slipping to 53.5 from 55.1 in June. The unusually warm weather and world cup fever that some thought would boost the sector – and in the case of bars and restaurants it did – was actually a hindrance for others and reduced footfall creating even more challenges for the high street.

There was also evidence of hiring difficulties, both due to a lack of skilled workers – something Bank of England policy makers clearly strongly considered when deciding to raise rates yesterday – and companies being reluctant to invest due to Brexit uncertainty. This has all created a rather uncertain and challenging environment for the sector and therefore the economy that is weighing on output and is likely to continue in the months ahead.

The pound broadly shrugged off the weaker number though, with it having already fallen heavily yesterday following the dovish hike from the central bank. Once again, it dropped below 1.30 against the dollar but appears to be finding some support around those levels. It has been less resilient against other currencies, such as the Canadian dollar, where it dipped below 1.70 for the first time since the start of the year.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.16591
Open: 1.15835
% chg. over the last day: -0.64
Day's range: 1.15769 – 1.15950
52 wk range: 1.0571 – 1.2557

Yesterday, the euro continued to lose ground against the US dollar. The drop in quotes exceeded 75 points. At the moment, the EUR/USD currency pair is consolidating. Demand for the US dollar is at a fairly high level. Investors expect statistics on the labor market in the US. The key trading range is 1.15750-1.16000. We recommend opening positions from these marks.

The news feed on 2018.08.03:

At 15:30 (GMT+3:00) a report on the US labor market will be published.

Indicators point to the power of sellers. The price has fixed below 50 MA and 200 MA.

The MACD histogram is located in the negative zone, but above the signal line, which gives a weak signal to sell EUR/USD.

Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.

Trading recommendations

Support levels: 1.15750, 1.15400, 1.15000
Resistance levels: 1.16000, 1.16250, 1.16550

If the price fixes below the support level of 1.15750, the EUR/USD quotes are expected to fall further. The movement is tending to 1.15400-1.15000.

Alternative option. If the price fixes above the round level of 1.16000, it is necessary to consider purchases of EUR/USD. The movement is tending to 1.16500-1.16750.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31158
Open: 1.30115
% chg. over the last day: -0.84
Day's range: 1.30028 – 1.30273
52 wk range: 1.2361 – 1.4345

Yesterday's trading on the GBP/USD currency pair was very active. The Bank of England, as expected, raised the key interest rate by 25 basis points to 0.75%. The regulator expressed concern about Brexit. At the moment, the GBP/USD quotes are consolidating in the range of 1.30000-1.30300. The positions should be opened from these marks. We recommend paying attention to the report on the labor market in the US.

The news feed on the UK economy:

At 11:30 (GMT+3:00) the index of economic activity in the UK services sector will be published.

Indicators point the power of sellers. The price has fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell GBP/USD.

Stochastic Oscillator is located in the neutral zone, the %K line below the %D line, which indicates the bearish sentiment.

Trading recommendations

Support levels: 1.30000, 1.29500
Resistance levels: 1.30300, 1.30550, 1.30700

If the price fixes below the round level of 1.30000, it is necessary to look for entry points to the market to open short positions. The movement is tending to 1.29500-1.29250.

Alternative option. If the price fixes above 1.30300, the GBP/USD quotes are expected to rise. The movement is tending to 1.30500-1.30700.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.29988
Open: 1.30187
% chg. over the last day: +0.15
Day's range: 1.30092 – 1.30303
52 wk range: 1.2059 – 1.3795

The technical pattern on the USD/CAD currency pair is still ambiguous. The trading instrument is in a sideways trend. At the moment, local support and resistance levels are 1.30000 and 1.30300, respectively. We recommend opening positions from these marks. Investors expect statistics on the labor market in the US.

At 15:30 (GMT+3:00) data on the trade balance of Canada will be published.

Indicators do not send accurate signals. The price has fixed between 50 MA and 200 MA.

The MACD histogram is near 0 mark.

Stochastic Oscillator is located in the neutral zone, the %K line is above the %D line, there are no signals at the moment.

Trading recommendations

Support levels: 1.30000, 1.29800, 1.29500
Resistance levels: 1.30300, 1.30750, 1.31200

If the price fixes above the resistance level of 1.30300, it is necessary to look for entry points to the market to open long positions. The target movement level is 1.30700-1.31000.

Alternative option. If the price fixes below the round level of 1.30000, the USD/CAD quotes are expected to fall. The movement is tending to 1.29750-1.29500.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.709
Open: 111.634
% chg. over the last day: -0.02
Day`s range: 111.608 – 111.783
52 wk range: 104.56 – 114.74

At the moment, the USD/JPY quotes are consolidating. The technical pattern is ambiguous. Financial market participants expect a report on the labor market in the US. Local support and resistance levels are 111.550 and 111.750, respectively. The positions should be opened from these marks.

The news feed on the economy of Japan is calm.

Indicators do not send accurate signals. The price has crossed 50 MA.

The MACD histogram is located near the 0 mark.

Stochastic Oscillator is located in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 111.550, 111.350, 111.000
Resistance levels: 111.750, 112.000, 112.150

If the price fixes below 111.550, the USD/JPY quotes are expected to fall. The movement is tending to the round level of 111.000.

Alternative option. If the price fixes above the "mirror" resistance of 111.750, it is necessary to consider purchases of USD/JPY. The movement is tending to 112.000-112.250.