Spreadex Market Update
Noxious non-farm report puts an end to European gains
No-one was expecting too much from today’s non-farm report, especially after the eventual damp squib that was supposedly meant to be the most important NFP figure since the crisis last month. However, a big miss in September’s headline number, coming in at 142k from the 201k forecast, alongside an unexpected downward revision for the August figure, from 173k to 136k, made this a more impactful report than first thought.
Add onto this stagnant wage growth and the fact that the USA’s labour force participation is at its lowest point since 1977, and the dollar plunged against both the pound and the euro, with analysts scrambling to revise their expectations for the timing of any US rate-hike to next March. Similarly, the Dow Jones dropped by around 200 points at the open; it appears that fears over the country’s economic health are currently stronger than the previously dominant worries over the impending (or not) rate-hike, with the fact that the Fed has arguably been vindicated in opting not to lift-off last month soothing no-one.
Just like yesterday the negative American open had a big knock-on effect for the European indices, with the DAX and CAC almost completely losing the robust gains they had been posting this morning. The FTSE, meanwhile, wasn’t as susceptible to the afternoon decline, flirting between mild losses and even milder gains as its commodity stocks by and large held onto their growth.
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