fbpx
  • Market Insights  >  Weekly Outlook

3 March 2022,06:59

Weekly Outlook

Markets Build Risk Appetite as ADP Nonfarm Exceeds Expectations

3 March 2022, 06:59

Share on:
FacebookLinkedInTwitterShare
Share on:
FacebookLinkedInTwitterShare

On Wednesday, 15:15 (GMT+2), data for the February US ADP Nonfarm Employment Change was released. At 475,000, the number beat out the market estimate of 378K, although it is still lower than the previous month’s 509,000. Broken down, February’s numbers indicate a significant employment drop of 96,000 in small businesses, although overall numbers are buoyed by an increase of 552,000 in large businesses.

Said Nela Richardson, chief economist, ADP. “Small companies lost ground as they continue to struggle to keep pace with the wages and benefits needed to attract a limited pool of qualified workers.”

Meanwhile, Fed chair Jerome Powell has indicated support for a more cautious 25-point rate hike in March, although the Fed was “prepared to move more aggressively” should inflation not subside. While the markets have been gradually reducing bets of a 50-point rate hike ever since tensions between Ukraine and Russia began, Powell’s latest comments have moved the needle significantly.

Post-market Effects

Following Powell’s comments, the US Dollar Index plunged while the equities markets rallied as risk appetite returned. US Treasury yields have also risen, with the 10-year note moving back above 1.8%.

Meanwhile, gold prices have cooled, falling from their 13-month high in response to both the Fed’s cautious stance and news that talks between Russia and Ukraine were set to resume. However, spot gold is still trading above the $1920 level, with its primary pressure still coming from the Russian-Ukraine situation. Chintan Karnani, director of research at Insignia Consultants said that U.S. economic data releases “will fail to impact gold and silver and industrial metals, as long as the Ukraine crisis doesn’t show signs of de-escalation.”

While the market might be in a risk-on mood currently, analysts warn that the waters could be choppy ahead. Gus Faucher, chief economist at PNC Financial has expressed that major upside risks in the coming months “include a recession in Europe, even higher inflation because of rising energy prices, and the increasing likelihood that the Fed could be forced to raise interest rates so aggressively to combat inflation that the recovery stalls”.

In the meantime, investors are advised to keep an eye out for the upcoming US Nonfarm Payrolls data, which will be released on Friday 4 March, 15:30 (GMT+2). As a friendly reminder, do keep an eye on market changes, control your positions, and manage your risk well.

Start trading with an edge today

Trade forex, indices, metal, and more at industry-low spreads and lightning-fast execution.

  • Start trading with deposits as low as $50 on our standard accounts.
  • Get access to 24/7 support.
  • Access hundreds of instruments, free educational tools, and some of the best promotions around.
Join Now

Latest Posts

Szybkie i łatwe otwieranie konta

Utwórz Konto na Żywo
  • 1

    Zarejestruj się

    Zarejestruj się na Live Account w PU Prime za pomocą naszego procesu bez żadnych kłopotów.

  • 2

    Fundusz

    Bez wysiłku doładuj swoje konto za pomocą szerokiego zakresu kanałów i akceptowanych walut.

  • 3

    Rozpocznij Trading

    Uzyskaj dostęp do setek instrumentów w ramach wiodących na rynku warunków handlu

Please note the Website is intended for individuals residing in jurisdictions where accessing the Website is permitted by law.

Please note that PU Prime and its affiliated entities are neither established nor operating in your home jurisdiction.

By clicking the "Acknowledge" button, you confirm that you are entering this website solely based on your initiative and not as a result of any specific marketing outreach. You wish to obtain information from this website which is provided on reverse solicitation in accordance with the laws of your home jurisdiction.

Thank You for Your Acknowledgement!

Ten en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso al sitio web está permitido por la ley.

Ten en cuenta que PU Prime y sus entidades afiliadas no están establecidas ni operan en tu jurisdicción de origen.

Al hacer clic en el botón "Aceptar", confirmas que estás ingresando a este sitio web por tu propia iniciativa y no como resultado de ningún esfuerzo de marketing específico. Deseas obtener información de este sitio web que se proporciona mediante solicitud inversa de acuerdo con las leyes de tu jurisdicción de origen.

Thank You for Your Acknowledgement!