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On Friday a robust NFP (nonfarm payrolls) report eased fears of a broad slowdown in the world’s largest economy and helped U.S. stocks and the US dollar spike. June NPF Report Better than Expected The U.S. economy added a more than expected 222,000 nonfarm jobs last month, following an upwardly revised gain of 152,000 the previous month that was originally reported as 138,000, the Labor Department said. Economists in a Bloomberg survey called for a monthly gain of 178,000. The June total was the second-highest of the year. Unemployment edged up to 4.4% from 4.3% as more workers entered the labor market. Workforce participation ticked up to ...
Gold prices settled at $1212.20 an ounce on Friday, suffering a loss of 2.36% on the week, as the dollar edged higher after the Labor Department reported that the economy added 222000 jobs in June, surpassing consensus estimates of 175000. Data also showed that average hourly wages increased only 0.2% but gains for the prior two months were revised up by a total 47K. Expectations of higher interest rates and a stronger dollar as well as the bearish near-term outlook are likely to continue to weigh on the market. Last week’s data from the Commodity Futures Trading Commission (CFTC) showed that speculative traders on the Chicago Mercantil...
Following a busy start to the first week of July, economic data from most of the developed economies take a back seat. Inflation will remain the key theme this week as the US will be reporting on the June consumer price index data. The Fed Chair, Janet Yellen will also be giving her semi-annual testimony to the Congress. In Canada, the markets are expecting a rate hike from the BoC this week, following the hawkish comments from the central bank officials. In the UK, the monthly jobs report will show whether wages are catching up with inflation or if there is further weakness in the pace of wage growth. Here is a brief list of events to watch ...
Over the last two weeks spanning the middle of 2017, the S&P 500 has mostly gone sideways even as its components have become more schizophrenic. The analysts at Deutsch Bank have an intriguing hypothesis about why that is (via ZeroHedge, we’ve added the highlighted links to the referenced figures): Looking at the transition from “low-volatility, high-dividend shares to high-volatility, low-dividend shares”, the German bank says that in recent months, shares with low volatility and high dividends are seen as alternatives to bond investment. Amid falling interest rates, risk-taking money had not been satisfied with inve...
S&P 500 The S&P 500 rallied on Friday, capturing all the losses that it had incurred during the Thursday session. It now looks as if we are ready to continue going higher, and perhaps reaching towards the 2450 level. Eventually, I believe that the 2450 level gets broken and we go to the 2500 level. I also believe that the market should continue to be choppy, but given enough time we should see plenty of buying pressure. The 2400 level underneath should continue to be a “floor” in the market, as the S&P 500 has enjoyed good earnings and of course bullish pressure over the longer term. I believe eventually we will be testing the...
EUR/USD 4 hour The EUR/USD bullish bounce at support (blue) was unable to break above the previous top (red). A bullish breakout above the top could see price move towards the Fibonacci target of wave 5 vs 1+3 and the round level of 1.15. 1 hour The EUR/USD retraced back and bounced at the Fibonacci levels of wave 4 vs 3. The wave 4 (orange) becomes unlikely if price breaks below the 61.8% Fibonacci level. USD/JPY 4 hour The USD/JPY uptrend continues within the uptrend channel (blue) and is moving towards the Fibonacci targets of wave 5 vs 1+3. The price angle however is slowing down (red resistance). 1 hour The USD/JPY broke above resistance...
On Friday the 7th of July, the euro closed down. Before the nonfarm payrolls report was released, the rate was trading within a range of 1.1407 – 1.1427 (20 pips). There was high activity among speculators keeping an eye on the market as the jobs report was being released. First, the euro rate reacted with a 20-pip slide to 1.1384, followed by a 57-pip surge to 1.1440. The market underwent some sharp fluctuations in both directions in the 5 minutes to follow. Once market volatility had subsided, the euro fell to 1.1380. In June, the US created 222,000 new jobs outside the agricultural sector after a forecast of 170,000. The figure for Apri...
What better way to mark the milestone with a look at a milestone in the emergence of emerging markets. We first showed this chart last year – the % share of global GDP attributable to emerging and developing economies. The surprising fact (to some) is that on this measure emerging markets have already become the dominant economic force. This has considerable implications already and going forward on a range of issues from the level and volatility of global growth, geopolitics and the world order, and of course in investment markets. In this note we extend the analysis to include equity markets. While emerging and developing economies...
The great thing about financial panics is that they teach you a lot about yourself and test the boundaries of existing thought which exposes the world to yearn for new understandings. The Great Financial Crisis was one of the most educational periods in finance and economics in modern times. But it’s funny to look back on the world because, as the old saying goes, the more things change the more they remain the same. While there was so much to learn from this period I am not so sure that we’ve actually digested all of those lessons. But I know my views have certainly evolved and changed over this period so here’s some of my big takeawa...