Daily Market Report - 02/10/2015

Yesterday in the United States, the Institute for Supply Management (ISM) said its index of national factory activity fell to 50.2 in September from 51.1 the month before. The reading was shy of the expected 50.6, according to a Reuters poll. US labour market conditions showed continued improvement with Continuing Jobless Claims falling in the month of September to 2.191m. 

Today, economists expect U.S. nonfarm payrolls data to show that employers added 203,000 jobs in September, according to a Reuters poll. A figure in line or better than forecast would enhance prospects of the Fed tightening monetary policy this year or early in 2016. The other focal point is whether U.S. wages rose enough to offset disinflationary pressures. 

A report out yesterday  said the Eurozone is in a "sweet spot" as it benefits from lower energy prices, a more competitive exchange rate and solid demand in the UK and US. The financial services firm predicts that investment spending will pick up in 2016, which will in turn boost GDP from 1.6 per cent to 1.8 per cent in 2016. Weak oil prices are helpful to household incomes, and the EEF expects consumer spending growth of 1.7 per cent in 2015, the strongest since 2007.

According to  Two  surveys released yesterday,  the Chinese factory sector continues to show a deterioration. According to the Caixin China General Manufacturing PMI, operating conditions are deteriorating at the fastest rate since March 2009 with the manufacturing activity index coming in at 47.3 . It found that production is still falling, forcing firms to lay off more jobs as unsold goods piled up. The official PMI also published yesterday  also showed a contraction of 49.7. 

Key Announcements
USD: 13:30 - US unemployment rate (Sept) expected to remain unchanged at 5.1%
USD:  13:30 – US non farm payrolls (Sept) expected to increase to 203K from 173K.