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Non-farm payrolls preview

Consensus estimate: 725,000 jobs added in August

There’s an eery sense of deja’vu as we head into today’s non-farm payrolls data…

The S&P 500 is at record highs, and the dominant narrative remains – the Fed will refrain from turning the stimulus taps off too quick in the belief that inflation is ‘transitory’ and ‘overheating’ is unlikely.  

Economists polled by Bloomberg expect that today’s non-farm payrolls report will show US employers added 725,000 jobs in August.

Average Hourly Earnings (Aug) is expected to remain stable at 4% year-on-year while the unemployment rate is forecast to continue its downward trend to 5.2%.

The gameplan for short-term traders remains very much the same as last month:

• In-line should see the bull run continue

• Big beat may trigger fears of overheating – forcing the Fed into a U-turn.

• Big miss may trigger fears of stagflation – high inflation in a stagnating economy.

On the price chart, the S&P has continued to carve out its powerful uptrend with resistance turned to support on multiple occasions in recent months.

US Non-farm payrolls data is released at 1.30pm (UK time)

S&P 500 Rolling Futures Daily Candle Chart