The US NFIB Small Business Optimism Index is the only notable release during the European session, with expectations of a possible downside surprise due to recent growth data. The focus of the day will shift to the US Job Openings data in the American session.
Scheduled for release at 14:00 GMT/08:30 ET, US Job Openings for January are projected at 7.630 million, slightly up from the previous 7.600 million. Although the last report fell short of expectations, the quits and hiring rates remained stable, indicating a resilient labour market with fewer job losses.
Market Sentiment And Federal Reserve Outlook
Market sentiment is cautious, as poor data could heighten concerns about slowing growth and inflation, which restricts the Federal Reserve’s options. The key event for the week will be the US CPI report, set to be released tomorrow.
The latest optimism index from the NFIB serves as a gauge of sentiment among smaller businesses in the United States. With weaker growth figures recently, there is reason to believe the data may fall short of expectations. However, this alone is unlikely to alter broader market trends unless the figure deviates meaningfully from forecasts. The more immediate focus lies elsewhere.
The upcoming US Job Openings data carries weight due to its role in assessing labour demand. A slight rise is currently expected, suggesting stability in hiring plans. Last month’s figures missed estimates, yet key measures—such as quits and overall hiring rates—remained steady. This points to a labour market that, while not accelerating, is not seeing widespread job losses either. That resilience is notable, given worries about economic momentum.
Inflation Data And Market Positioning
At present, caution dominates sentiment. Any disappointing data could fuel concerns regarding slowing growth at a time when inflation remains uncomfortably elevated. That would complicate the US central bank’s position, as it continues to weigh economic risks. A softer report today may not cause an immediate shift in expectations, but it would reinforce narratives that monetary policy is in a delicate position.
Tomorrow’s inflation data remains the focal point, with its outcome likely to dictate trading direction for the rest of the week. Until then, positioning adjustments could be more measured, as markets await a clearer signal on where price pressures are heading. As always, unexpected deviations from forecasts stand to prompt sharper reactions.
