Börse & Märkte

Markets Await Delayed US NFP Release

European markets are trading broadly flat as investors play safe by reducing exposure to risk ahead of the much anticipated US payroll data that is expected to shed some light on the Federal Reserve’s monetary stimulus outlook. The September release of the US payrolls report has been delayed to the recent US government shut-down which saw the closure of the BLS, the Federal agency responsible of combining the jobs release.

 

Now that the US fiscal situation has been tamed, the markets’ focus returns to US monetary policy; will the Fed taper or not? Given that the deal to avert a US default by raising the debt limit and funding the Treasury is a short term fix until early next year when lawmakers will have to address the issues again, many in the market are convinced the Fed is likely to hold off tapering activities until the fiscal soap opera ends for sure.

 

That could take a few more months; expectations for tapering are now moving to mid-2014 though some do reckon the Fed can fire it off in December, if data supports the case of tapering. Today’s payrolls report is likely to have a positive reaction; good or bad number. Expectations are for around 180k jobs to be added by the US in September and the unemployment rate to remain unchanged at 7.3% - a figure below 180k will be viewed as more reason for the Fed to keep QE measures intact as it would suggest the US economy was weak before the US shut-down. A figure better than 180k would be dismissed by markets as many will deem it as a backward report which hasn’t factored in the full effect of the government shut-down in the labour market.

 

Briefly on  earnings out today; ARM Holdings numbers come in better than expected with stunning licensing figures, well ahead of market expectations. EPS is in line, with gross margins and opex both ahead of estimates. The weak spot was processor royalties below expectations, with the growth rate slowing to 12% to 14% from around 26% the year before. That spells trouble for upcoming quarters as smartphone and tablet revenues are expected to decline.