US Open: Stocks rise as jobless claims hit a 10 week high

US futures

Dow futures +0.1% at 32830

S&P futures +0.05% at 3993

Nasdaq futures +0.01% at 12216

In Europe

FTSE -0.47% at 7887

Dax -0.4% at 15585

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Jobless claims rise by more than expected

US futures are reversing earlier losses as investors digest the latest U S jobless claims figures which came in higher than expected.

US initial jobless claims rose 211k last week up from 192k in the previous week and ahead of expectations of 195k. The data comes after stronger than expected ADP private payrolls yesterday and as investors look ahead to the release of highly anticipated non-farm payrolls data tomorrow.

Jobless claims rising to a 10 week high has helped to ease concerns and could suggest that the labour market is starting to show some early signs of slack appearing. All eyes are now on tomorrow’s NFP data to see whether it is another blowout report or whether it was a one-off.

The very tight labour market had been putting pressure on the Federal Reserve to continue hiking interest rates aggressively. Fears over aggressive rate hikes from the Federal Reserve ramped up this week after Jerome Powell testified before Congress and warned that The US central bank could ramp up the pace at which rate hiked and rates could remain higher for longer.

The Fed needs the hot job market to cool to take pressure off wage growth in order for inflation to come down back towards the feds 2% target rate.

Corporate news

Uber is rising market amid reports that the ride hailing app could spin off or sell the freight part of the business. this would leave the ride hailing and food delivery businesses which are still growing together whilst the fright business which is experiencing a slowdown could be spun off as an IPO or sold.

Where next for the Nasdaq?

After rebounding off the 50 sma the Nasdaq ran into resistance at 12470. The 50 sma is set to cross above the 200 sma in a bullish signal. The RSI is also supportive of further gains. However, buyers would need to rise above 12470, the weekly high, to extend gains towards 12900 the February high, creating a higher high. Should buyers fail to defend the 20 sma, sellers could look to take out 12000 round number and test 11920, the golden cross level, ahead of 11835 the March low. A fall below here creates a lower low.

FX markets – USD falls, JPY rallies

The USD is falling as the bulls pause for breath after two days of gains. The US dollar index continues to trade around a monthly high supported by expectations that the Fed will hike rates higher and for longer.

USD/JPY it's falling under performing it's major peers as the safe haven yen benefits from the risk off mood. tension is also turning towards the BoJ interest rate decision later. central bank is expected to keep rates on hold in Kuroda’s final monetary policy meeting

GBP/USD is rebounding recovering the 2023 low hit in the previous session. the move higher comes despite a lack of fresh fundamental catalysts and as investors look ahead to the release of GDP data tomorrow. expectations are for GDP to rise 0 .1% after falling -0.5% in December. That said games may be capped by BoE – Fed divergence.

USD/JPY -0.6 just put a mouth of something in my mouth how's it again this is how's your office your who's your group which will be run i don't mind them little 15 minute was policy9% at 1.0660

GBP/USD +0.4% at 1.19

USD/JPY -0.9% at 136.10

Oil steadies after losses

Oil prices are heading lower for a third straight day as recession fears rise with expectations of higher interest rates.

Fed Chair Jerome Powell’s comments earlier this week in Congress stoked fears that the Fed will raise interest rates higher, fueling recession worries and hurting the oil demand outlook.

The downside is being capped by an unexpected draw in US crude oil inventories. according to the latest EIA data. US crude stockpiles fell 1.7 million barrels, snapping at 10 week run of increases.

WTI crude trades -0.2% at $80.30

Brent trades at -0.3% at $85.82

Learn more about trading oil here.

Looking ahead

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