US Stocks Jump on Weaker Jobs – Nasdaq up 1%
US Stock markets moved higher again on Friday after jobs data confirmed a slowing in the market. The headline non-Farm employment data came out slightly higher than expected, but downward revisions to previous numbers and an uptick in the unemployment rate had the bigger impact on the market. All three major indices pushed higher, the Dow gaining 0.17%, the S&P rising 0.54% and the Nasdaq surging up 0.9% to finish at another record level. US treasury yields pulled back hard, the 2-year losing 8.9 basis points to 4.604% and the 10-year dropping 6.9 basis points to 4.278%. The dollar also dropped further after the data, the Dxy closing the day down 0.28% at 104.87. Oil prices were lower as talk increased again of a ceasefire in Gaza, Brent off 1.02% to $86.54 and WTI falling 0.9% to $83.16. Gold, however, drove higher again adding another 1.39% on the day to close out the NY session around $2,388 an ounce.
Geo-Politics to Hit Currencies into H2
The Euro has seen some sharp moves in recent weeks as politics have started to weigh on currencies. The main mover for the Euro was the snap elections in France and we have seen some good moves in the currency as a consequence of the machinations around the outcome. The UK has also just ushered in a fresh government and although the pound saw little volatility on election day as expectations were largely met, many traders are expecting to see a lot more moves for sterling as the new regime cuts its teeth. And of course, we have the small matter of the pending US election, which even a few weeks ago had done little to influence markets, but now if featuring on most economic updates on a daily basis. Many in FX are now looking ahead to the second half of the year with a very keen eye on the impact of political change on markets and if recent updates are anything to go by, it should prove to be a more volatile ride than H1.
Quiet Start to the Trading Week
The week ahead on the event calendar is certainly looking a lot quieter than last week and today’s cupboard is looking particularly bare. Euro traders will continue to monitor the impact of the French election results as the day progresses – at the moment we are looking at shock victory for the left-wing coalition – but in terms of data releases and risk events, there is very little on the calendar. US markets are likely to open on a positive note again after Friday’s jobs updates but as with the European sector, political updates on the upcoming election and its participants may dominate newswires in the session ahead.
