The market is once again failing to make ground after the US session started with a spring in its step but gradually gave back all its gains throughout the day.  The US futures are weaker too and already we are calling the Dow to open 40 points lower at 8465 and the S & P 5 points in the red at 918.3 at the time of writing.

The FTSE is choppy this morning and has recovered partially from its lows back to the 4300 level.  The indecision and lack of direction can be attributed to the non-farm payroll data that’s due to be released from the US at 13h30 today.  This is usually THE market mover and last month’s figure came in much better than expected, causing a gap higher in futures before the cash markets opened at 14h30.  But since that release the markets have drifted sideways and come off a little throughout June, and it’s hard to see that sort of situation changing, even if there is a big surprise to the up or downside when today’s figure is released.  Expectations are for a decline of -365k after June’s fall of -345k, and after last month’s shock figure it’s hard to see the market consensus being too far wrong this time.  The overall unemployment rate is due to rise from 9.4% to 9.6%, the highest level since 1983.

In Europe, the unemployment rate has moved from 9.2% to 9.5%, worse than expected, however this is not the main focus of the day and the markets, FX included, barely battered an eyelid.  Before the NFP, the ECB announce their interest rate and are expected to hold at 1%.  This could well cause a small flurry of activity before the big number at 13h30.

So far this week there’s been a test of sterling’s strength against the euro as sterling has given up over 2% against the single currency and is at this moment testing the upward trend line that’s been formed since March at 1.0500.  At the time of writing sterling/euro is at 1.1600, with the trend line sitting around 1.1550 and already there’s been a little support around this area.  As commented previously, sterling’s initial sell off at the end of 2008 did look hugely over done, and gradually the pound has been clawing back much of those loses as investors realised that the eurozone is hardly any better off than the UK.  But as the interest rate differential currently stands, with UK rates at 0.5% and EU at 1.0%, positive sentiment for the euro is starting to build once again.  The comments from the ECB have been largely more hawkish than the BOE and once again today the focus will be on words rather than actions.

Crude continues to fall around the $70-$72 mark and is not far off making its second close below its 20 day moving average.  This morning’s dollar strength is taking its effect on oil and gold.  With the lack of impetus to push markets onwards to fresh highs, this is becoming a concern for the bulls, but without any major move in either direction, it’s sideways for the time being (how original!).