Spreadex Market Update
US non-farm provides swift rebuttal to dovish IMF
With better than expected wage growth and only a slight miss in the unemployment rate, it was a rather good afternoon for US data. The strength this lent the greenback is understandable; after dovish comments from the IMF and a dismal performance against the euro for much of the week, investors were clearly eager to get back to a traditional bit of dollar dominance.
Unsurprisingly the Dow Jones reacted poorly to the news, even if it managed to recover the more excessive losses it suffered after the non-farm figure was initially released. Yet before anyone gets too excited about the chances of a rate hike in September, or even July(!) as some analysts have floated, it will, or rather should, take more consistency from US data than one strong non-farm figure for the Fed to abandon its cautious approach to an interest rate rise.
Considering Friday was meant to be one of many defining days in Greece’s deadline laden June, it has been a bit of a disappointment for those traders that love the DAX’s trademark volatility. Compared to some of its performances in the rest of the week, the German index has been relatively, if negatively, calm this Friday. At the end of this hectic, and draining, week of Greece-dominated discussion, the DAX has periodically touched lows it hasn’t seen since the end of February, with a long way left on this debt debate journey to go.
The FTSE was fairly consistent in its losses this Friday, despite an improving situation in its commodity stocks. Whilst Brent Crude itself has been rather choppy this afternoon following the news that OPEC is to maintain its output at its current levels, this sign of clarity from the oil cabal has helped stocks like BP and Shell recover some of the losses they saw throughout Thursday afternoon and Friday morning.
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