To the scoreboard:
Dow: 22,092.81 +66.71 (+0.30%)
S&P 500: 2,476.83 +4.67 (+0.19%)
AUD/USD: 0.7926 -0.0004 (-0.05%)
ASX200 SPI futures (Sept contracts): 5,684 (+24)
Iron ore benchmark 62% fines: $US74.12 (+1.6%)
1. US dollar rejoins the party: US employment figures beat expectations on Friday night, with 209,000 jobs added against 178,000 forecast. Monthly wage growth also ticked slightly above expectations at 0.3%. The US dollar index rose back above 93 — still around eight points lower than in February. Amid political gridlock and a consistent run of soft data points, weakness in the US dollar has been the main theme in currency markets this year and traders will be assessing whether Friday’s data will be the catalyst for renewed strength. This chart shows the USD index’s decline in 2017:
2. Employment data gives bonds a little shake-up: On the strength of the employment data, US bond yields (which move inversely to their price) climbed by 5 basis points to 2.26%. That’s after hitting their lowest level since late June earlier in the week, mainly due to political turmoil in Washington. UK 10-year bond yields fell to 1.17%, their lowest level in over a month following a dovish statement from the Bank of England in its interest rate announcement on Thursday.
3. Data today: The Aussie dollar dipped against the greenback on Friday, falling as low as 0.7888 before climbing back above US79 cents. Among the major currencies, the UK pound fell the sharpest on the combined effect of the US employment data and a dovish BoE. On the data front today, there’s the Ai Group’s Performance of Construction Index (PCI) at 9:30am AEST. Then there’s ANZ jobs ads for July at 11:30am AEST, following a strong reading in June.
4. Aussie stocks set to rise: The S&P500 traded flat on Friday, while the broader Dow index nudged ahead to its eighth straight record close. Stocks in Europe had a good session as the weaker euro buoyed sentiment, while the UK’s FTSE also rose by 0.5% helped along by a drop in the pound. Those results have led ASX futures traders to bid the local index up ahead of this morning’s open, after a slight fall on Friday as Commonwealth Bank shares dropped almost 4%.
5. Bitcoin juggernaut rolls on: It was a big weekend for Bitcoin, with the world’s biggest cryptocurrency hitting a new record high of $US3,360. The split in the currency earlier in the week evidently posed the original Bitcoin version, which remains near record highs in early trade this morning while the alternative Bitcoin Cash has fallen in value.
6. Strong session for commodities: The recent gains in iron ore markets continued on Friday night, with spot prices for benchmark 62% fines hitting a four-month high above $US70 a tonne. Oil got a boost on Friday from the strong employment data in the US, with benchmark crude rising above $US52 a barrell. Speculative long positions in oil are now at their highest level since March this year. Gold slipped on Friday as the US dollar strengthened, but is now back above $US1,260 an ounce.
Enjoy your week, I’m on Twitter @Mr_SamJacobs.