US Markets Push Higher After Non-Farms – Nasdaq up 1.2%
US stock markets drove higher in trading on Friday after the key Non-Farms Payroll data came in stronger than expected. The Dow added 1.05% on the day, the S&P 1.03%, and the Nasdaq jumped 1.20%. The dollar also pushed higher against the majors, the DXY up 0.50% to 99.19, while Treasury yields pulled back — the 2-year down 2.7 basis points to 4.010% and the 10-year down 0.8 of a basis point to 4.498%. Oil prices leapt higher on the back of the strong data and positive sentiment driven by the resumption of trade talks between the US and China, Brent up 1.73% to $66.47, and WTI up 1.91% to $64.58 a barrel. Gold fell in line with the dollar, losing 1.32% to finish at $3,309.67 an ounce.
Jobs Data Keeps Fed on Track
Friday’s Non-Farm Payroll number looks to have locked in another ‘hold’ for the Federal Reserve Bank at its next meeting, due to finish on June 18. The market wasn’t expecting them to cut then, but some doves were hoping that a weaker print on Friday could have pushed expectations up for a cut. However, the stronger-than-expected number has put paid to any of those ideas, with the market now pricing in a 99% chance of a hold. Expectations have moved further down the curve as well, with the July meeting now being priced in with just a 14% chance for a cut, down from nearly 50% a month ago, while the September meeting is now priced in with a 55% chance. The dollar rallied well on the back of the news, and some bulls are hoping that if we start to see positive moves on the trade front that could accompany the stronger jobs numbers, then the greenback will move back to higher levels against the majors.
Quiet Start to the Trading Week
The macroeconomic calendar is a lot quieter this week, and traders are expecting to see rangebound conditions in the sessions ahead today. There are several bank holidays today which could affect liquidity levels, with Australia, Switzerland, France, and Germany all having long weekends. The main focus for the Asian session will be Chinese inflation data that comes out early in the day. Both CPI and PPI numbers are due, and any deviation from the expected -0.2% and -3.1% prints will see volatility in the CNY. There is little on the calendar in the latter two sessions today to move markets; however, traders will be keeping a close eye on newswires for any updates on trade talks across all jurisdictions.
