Financial Fixed Odds Betting: Morning Report: Strong payroll gain expected

Morning Report: 08.15 London

• This morning forex traders are keeping their powder dry ahead of the big US Non Farm Payrolls report.

• Markets are quiet this morning with the standout moves coming from antipodean currencies. Traders continue to bet on a New Zealand rate cut with the NZD/USD trading down 0.51%. The AUD/USD is also trading lower, down 0.18%.

• This morning the UK Halifax House Price Index showed a bigger loss than expected, but so far pound has showed little reaction.

• Last night there was strong demand for risk taking with stock markets rallying hard into the close. The Dow Jones close up 1.59% with the Nasdaq 100 closing up just shy of 2.00%. The FTSE 100 closed up 1.52%.

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• Last night the yen slumped with the USD/JPY closing up 0.75% and the EUR/JPY jumping 1.43% higher. There were similar moves on the swiss franc with the USD/CHF closing up 0.75%. Gold saw its biggest single day sell off since the end of January as investors dropped their demand for safe haven assets.

Coming up today:

• The consensus analyst estimate is for today's Non Farm Payroll is for the strongest growth in jobs since June 2010, with 191,000 jobs expected to be added.

• However, don't be surprised if the number comes in lower than this, Zero Hedge have posted a neat summary of every Non Farm Payrolls report since 1998. This shows that there is a negative surprise 53% of the time (the job numbers came in below estimates). This doesn't translate into a negative market reaction though, with the average return for the S&P 500 on a Non Farm Payroll day being 0.14% vs the average daily change of 0.03%. So even if payroll numbers come in below estimates, stock markets are still likely to post sizeable gains.

• US unemployment rates are also released at 13.30 with a slight rise to 9.1% is expected.

• Canadian Ivey PMI is released at 15.00 with a gain to 50.6 expected.

Bet Idea:

• The AUD/USD has been range bound of late with yesterday having the tightest trading range since the start of February. With Non Farm Payrolls to come, there is the potential for a breakout in the next couple of days.