03.09.202109:23 Forex Analysis & Reviews: US stock market hold at highs ahead of NFP data

The US stock market rose slightly on Thursday and remained at the annual highs.

The Down Jones grew by 0.4%, the NASDAQ Composite swelled 0.14%, and the S&P 500 index advanced by 0.3%.

Asian stock markets closed mixed during the week. Japan's stock indices jumped by 2%, while China's stock indices fell by 0.5%. The sharp growth of the Nikkei 225 was attributed to the statement of Japan's Prime Minister Yoshihide Suga. He said he would not seek re-election as a ruling-party leader, effectively ending his term after just a year. The election is scheduled for October 21 this year.

Another important election will be held in Germany this September. Angela Merkel will step down as the Chancellor of Germany. Currently, the Social Democratic Party is leading in the polls, but the other two strongest parties, Merkel's CDU-CSU bloc and the Green Party are slightly behind. The winners will have to agree on a coalition to create a stable government.

As for the commodity market, oil prices soared again. Brent crude approached $73 this morning amid a significant decline in US oil stockpiles for the week.

The number of new coronavirus cases worldwide neither grows nor slows down. There were almost 700,000 new cases yesterday. The US reported 177,000 new cases. In the UK, there were 38,000 cases. the death toll in the US totals 1,500 deaths.

The S&P 500 index is trading at 4,537. It is likely to stay in the range of 4,510-4,560. The US jobs report on Thursday turned out to be moderately positive. Long-term unemployment fell in a week to 2.75 from 2.9 million people that is, by 150,000 per week. At the same time, the number of initial jobless claims also dropped to 340,000 from 353,000. The US trade deficit in July remained approximately at the level of the previous months – $70 billion. Industrial orders increased by 0.4% in July. However, the growth slowed significantly from 1.5% in June. Today, investors are anticipating the Nonfarm Payrolls report for August. The economy is projected to add 700,000 new jobs. Yet, ADP data showed that the economy created only 374,000 new jobs in August. This is why many analysts predict a weaker-than-expected result. The unemployment rate is forecast to decline to 5.2% from 5.4%.

Executives of hedge fund Renaissance Technologies LLC will pay as much as $6 billion to US tax authorities after agreeing to settle a dispute. James Simons, the founder of one of the world's most hedge funds, will make an additional settlement payment of $670 million to the Internal Revenue Service

The market is experiencing a shortage of chips. Ford and General Motors reported that they were forced to reduce production due to a shortage of semiconductors.

The US dollar index is trading at 92.20. It is likely to remain in the range of 91.80–92.50. The US dollar fell yesterday due to a sharp rise in the EUR/USD pair. The euro is gaining momentum amid an increase in EU inflation and before the elections in Germany.

The USD/CAD pair is trading at 1.2540. It is likely to stay in the range of 1.2480-1.2580. The pair is slowly declining after a new increase in Brent crude by $73 and a decline in the US dollar.

So, currently, investors are awaiting NFP data in order to pick up a trading strategy.