News & Analysis
U.S unemployment hits 3.7% – Stocks continue lower on rate worries – Yields continue to gain; GBP jumps on Brexit deal hope
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U.S and Canada observing bank holidays for Thanksgiving Day.
U.S markets moved lower on Friday, the S&P500 posting its worst week since September. The Index closed 16 pts lower on Friday’s session. The Dow lost 180 and the Nasdaq fell by 91 pts. Markets looked past the lower than expected NFP figures that came in at 134K missing 185k expectations. The focus was on earnings they came in at 2.8% which was expected this looks to keep the Fed on track and continues the markets current worry regarding interest rate raises. Unemployment fell to its lowest level since 1969 hitting 3.7%!
“The labor market is going to keep getting tighter and that will mean higher wages,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “This is going to keep upward pressure on rates and continue to put downward pressure on stocks.”
The 10-year note yield rose to 3.24% and hit a fresh 2011 high while the two-year note yield advanced to 2.897%. yields continue to worry traders around rates. The Cboe Volatility Index (VIX), hit a high of 17.36, its highest level since July.
European shares ended the week lower, basic resources stocks were the worst performers losing 2.53%. Traders looked to the US employment data and watched yields. Danske Bank fell more than 9% on news it faces a U.S. criminal investigation into a 200 billion euro money laundering scandal at its Estonian branch. – CNBC Italy’s anti-establishment government has announced its new strategy to financial policy: a “brave and responsible” initiative, ending weeks of speculation about its spending plans. The FTSE MIB closed deep in the red on Friday. – CNBC The FTSE closed 99.80 lower – the DAX lost 132 and the Euro Stoxx 50 ended 29.57pts lower.
Oil saw a volatile week with U.S. sanctions on Iran are set to go into effect in November. Markets built up large long positions in anticipation of more increases in prices. USOUSD ended Friday’s session 35 cents lower. Gold traded 3.70 higher on Friday after mixed U.S employment data. For now 1208 range resistance continues to hold firm.
The USD was mixed at the end of the trading week. Post NFP dollar bulls made gains to the AUD but lost ground to the GBP and EUR. The EUR after testing lower fought back to end the week slightly higher. The GBP is running on Brexit influences, it closed out the week with solid gains +96 to the Dollar and +88 to the Yen. The AUD continues to be sold ending the week 24 pips lower to the USD and 40 pips lower to the Yen. Shocker of a week for the AUD 180 pips lower to the USD. The USDJPY settled 16 pips lower and the USDCAD added 22 pips in a volatile day.
Tonight’s U.S session could be quieter than normal as markets observe the Thanksgiving Holiday.
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Sources; CNBC – All times are AEST
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