Money flow – Positioning before NonFarm Payrolls (today 15:30)

Stocks and metals in Asia rose as China increased stimulus to help its struggling economy, while traders await Friday’s 3:30 p.m. jobs data to gauge the outlook for Federal Reserve policy. This will improve risk appetite, but the focus is on news that will determine the mood of the market.

Since the easing measures in the real estate market and the reduction in the Reserve Requirement Ratio were announced before the market opened, it may be that this timing is being used to support Chinese assets, especially as PMIs are giving some positive signals.

Fears that the Fed will keep interest rates higher for longer to prevent price pressures from intensifying have weakened equity markets around the world. We are likely to see positioning before the labor market data at 15:30, with low unemployment rates expected to remain, but a decline in added jobs, which could spur a positive reaction from US stocks.

The Fed’s preferred gauge of underlying inflation rose yesterday, stressing the market slightly, but the increase was small, which still keeps bets of more hikes low.

Today is the last day of the week and the first day of the month, which could lead to further volatility after the US data. Bank traders are closing positions on Friday, and hedge funds may rearrange their portfolios, leading to a stronger-than-expected fluctuation once we see what the state of the labor market.

Friday sessions are not recommended for taking new positions, and the NFP week is always quite nervous and highly volatile, so it is better to wait until the beginning of next week to decide on a trade.