From Greg McKenna of GlobalFX and Lighthouse Securities, here’s a quick run-down of what the market will be chattering about this morning.
– Don’t worry about the Australian election announced yesterday – it shouldn’t make too much difference to markets.
– Non-farm payrolls were lower than expected on Friday printing a rise of just 162,000 versus the 184,000 expected and hourly earnings (+1.9% YoY v 2.2% expected) weren’t nearly as strong as many had hoped but unemployment fell to 7.4% for a 4 year low.
– It was a confusing jobs report with a little bit of something for every market which is what we saw. Stocks rallied tentatively, bonds also rallied a little but as has become usual it was FX markets were much of the volatility was felt. At the close Euro (1.3278), GBP (1.5286) and Yen (USDJPY 98.91) were all stronger against the US dollar but the Aussie was unable to hold gains closing off the lows but down at 0.8897.
– The stock market too was volatile with the S&P taking a solid hit after NFP but recovering with the S&P 500 (+3 pts, 0.18% @1,710), Dow (+30 pts, 0.19% @15,658) and the Nasdaq (+14, 0.39%) all closing on the highs of the day as the Septaper becomes Dectaper or even NextTaper for 2014.
– European markets missed much of the US rally closing flat to down mostly. The FTSE fell 0.51%, the DAX a marginal 0.04%, the CAC rose a tiny 0.08% while in Milan and Madrid stocks where down 0.24% and up 0.40% respectively.
– Bonds rallied hard in the US and Germany off their highs with US 10′s falling from 2.75% to 2.60% at the close while in Germany the 10 year Bund rate dropped from 1.74% to 1.65%. In the UK 10 year gilts were higher on the day up 2 pts at 2.425% but down from the high at 2.49%.
– On Commodities gold had a wild and crazy day falling to $1283 before bouncing back to close at $1307 oz. (much damage was done to the bull case), Nymex crude fell 0.88% but Dr Copper rose a smidge to $3.16 lb. Our friends the Grain complex had another big day with corn down 2.36%, wheat up 0.38% and soybeans down 1.97%.
On the Data front it’s a bank holiday in NSW so FX and Bond markets will be very quiet but that doesn’t stop the releases from flowing with the TD monthly inflation gauge as well as retail sales in Australia. In China we have the HSBC Services PMI to follow on from the official non-manufacturing PMI over the weekend. In Japan we get the BoJ’s economic survey and then in Europe and the US we get the Markit and ISM non-manufacturing surveys.
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