- The mixed NFP data on Friday, the rumours of China removing Zero Covid restrictions and comments from FED member Evans all combined to see a bounce in stock markets, a cooler USD and a gargantuan leap in Commodity prices. NFP head line beat at 261K vs 200k and last month was revised higher to 351k, Earnings slipped to 4.7% from 5.0% but Unemployment rose to 3.7% from 3.5%, suggesting the interest rate hikes are beginning to have an impact. The USD Index slumped to 110.70, from 112.75 highs. Stocks rallied +1.25% on Friday, but declined -1.39% to -5.65% last week. Yields moved higher (10-yr 4.163%). The major beneficiary was the Commodity Complex which leaped between 3.36%-8.00%. Evans suggested that the FED may start “thinking” about pausing, even if that did not happen until Q423. Asian stocks are firmer today despite Chinese Covid infections hitting a 6-mth high, Beijing reaffirming strict pandemic rules and a big miss for Chinese trade.
- EUR – rallied from close to hit 8-day lows on Friday at 0.9730 over 200 pips to 0.9960. Villeroy: It could take 2-3 years for inflation to return to target & rate hikes need to continue.
- JPY – has retaken 147.00 and trades at 147.40 from 146.60 NFP lows.
- GBP – Sterling tested 1.1150 again following the immediate NFP announcement but closed at 1.1370 and trades back to 1.1300 now.
- Stocks – Wall Street were higher with big moves for Tech stocks again (MSFT +3.33%, GOOG +3.85%, Alibaba +7.05%, JD.com +9.74%). US500 closed +50.02 (+1.36%) at 3770, (a loss of -3.34% for the week) FUTS trades at 3763 now. Berkshire Hathaway posted a Q3 loss of $2.69b, but operating profits beat estimates by 20% and stock investments increased by $3.7b.
- USOil – charged from $87.75 lows on Friday to test the $93.00 zone, rallying over 5% following all the “China opening” gossip. Back to $91.00 now.
- Gold – gained over 3.4% on Friday closing at $1680 and breaching key levels. Back to $1670 now.
- BTC – rallied with the weaker USD and risk on mood on Friday to top at $21.2k, back to $20.6k now, but holding above the key $20K level.
Today – EZ Sentix, Speeches from ECB’s Lagarde, Panetta, BoE’s Pill, Fed’s Barkin, Mester & Collins. COP27 sees world leaders in Egypt this week and US clocks moved back 1 hour so the difference between London (GMT) & New York (ET) back to 5 hours.
Biggest FX Mover @ (06:30 GMT) NZDUSD (-0.72%) reversing some of Friday’s rally to 0.5935, from 0.5740 on Thursday, and trades at 0.5875 now. MAs unaligned & flat, MACD histogram & signal line positive but falling, RSI 50.00 & neutral, H1 ATR 0.00198, Daily ATR 0.01077.
Click here to access our Economic Calendar
Stuart Cowell
Head Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
