Markets, commodity currencies look perky, two critical NFP hints eyed

Here is what you need to know on Wednesday, September 1:

Stock markets are upbeat and the dollar is mixed as a new month begins. Commodity currencies stand out with gains ahead of the OPEC+ meeting and the euro is holding up amid hawkish ECB comments. US ADP jobs figures and the ISM Manufacturing PMI serve as hints toward the Nonfarm Payrolls. 

New month, same rally: US stock markets ended August with a minor decline, but close to record highs. Investors remain upbeat about the prospects of the world’s largest economy despite a drop in the Conference Board’s Consumer Confidence to 113.8 points, worse than expected. 

Conference Board August Consumer Confidence: The Michigan survey plunge was no fluke

Monetary support: Federal Reserve Chair Jerome Powell’s dovish remarks on Friday – in which he refrained from hinting at tapering – continue supporting the market and weighing on the dollar. The US housing market remains resilient with an annual increase of 19.1% according to the Case Shiller Index. 

Euro taper? European Central Bank members Klaas Knot and Robert Holzmann signaled they would support tapering down the institution’s emergency bond-buying scheme. Both spoke after preliminary inflation figures beat estimates with 3% on the headline figure and 1.6% on the core one. EUR/USD is trading around 1.18 and final Manufacturing Purchasing Managers’ Indexes are eyed.

OPEC+ members convene on Wednesday and will likely back extending the gradual return of the output to normal, easing the reductions. WTI Crude Oil is trading around $59, off the highs seen in August but above levels seen earlier this year. USD/CAD is trading around 1.26, with the loonie finding its feet after Canadian quarterly growth disappointed with -1.1% annualized in the second quarter. 

Australian growth: AUD/USD stands out by trading above 0.73 after the land down under-reported a growth rate of 0.7% in the second quarter of 2021. Investors seem to be ignoring the disappointing Chinese Caixin Manufacturing PMI, which dropped to 49.2 points, contracting.

Nonfarm Payrolls hints: ADP’s private-sector jobs report is projected to show an increase of 613,000 positions in August. The publication serves as a clue toward Friday’s official NFP. Later in the day, the ISM Manufacturing PMI is another hint, and it could have an outsized impact as the parallel services PMI is released only after the Nonfarm Payrolls. 

See: 

ISM Manufacturing PMI Preview: Why it could be the trigger for a big greenback comeback

Nonfarm Payrolls August Preview: Sine qua non for the taper

Gold has been holding onto its gains, trading above $1,810 amid the upbeat market mood and prospects of ongoing bond-buying from the Fed. 

Cryptocurrencies: Ethereum has been standing out with substantial gains, hitting $3,500. Bitcoin is stable at around $47,000 and Ada is changing hands at around $2.80.