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Dow Jones Oil plunge; NFP – Powell and Trade War worries hurting sentiment; Risk mixed to USD; Gold ended the week higher

Apr 9, 2018 | Daily Market Outlook

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US markets – buckled on Friday night as multiple influences hit trader sentiment. The Dow Jones was the hardest hit losing 572.46 points. Boeing and Caterpillar key Dow stocks dragged the index lower as they lost 3% due to trade war exposure.  The S&P500 ended 58.37 points lower and the NASDAQ closed 161.44 points lower.

It all started on Friday with worse than expected employment data, average earnings came out as expected at 0.3%. The Non-farm payroll figure missed 188K expectations coming in at 103K. Unemployment remained at 4.1% failing to decrease to 4.0% as expected. The market was already on edge after Presidents Trump put forward new tariffs for Chinese products. Fed Chair Powell added to the plunge as he indicated Fed would continue hiking rates this year, despite the recent market volatility. The Dow traded -76702 at one stage in the session.

European markets – traded in the red on Friday as US trade war fears continue to burn. The US employment figure just adding to unsettled investor sentiment. The FTSE closed 15.86 lower. The DAX dropped 63.92 points and the CAC closed 18.42 lower. Europe’s auto stocks led the losses on Friday, down almost 1.7 percent amid heightened trade tensions. Schaeffler and Hella were among the worst sectoral performers, down 1.33 and 1.57 percent.

Oil – followed stock sentiment on Friday seeing strong selling. WTI closing 2.3% lower at $62.02. “Oil’s taking the latest trade war stuff pretty hard. It sold off immediately last night when Trump announced the tariffs,” said John Kilduff, founding partner at Again Capital. “We’re taking a hit with the rest of the market,” Russia said its cooperation with OPEC might become an indefinite arrangement. This morning prices are trading 24 cents higher.

Forex – mixed results for risk last Friday as the NFP lead the USD lower but the AUD failed to rally. The EUR and GBP made gains to the JPY and USD. Canadian employment data came out better than expected, the USDCAD ignored this as the CAD fell lead by plunging oil prices. The JPY traded mainly higher, the GBP the only major closing higher. The USDJPY gave back 46 pips, ass trade war worries sent the JPY higher to the USD. This morning the AUD and GBP have started the week stronger to the USD. Gold rallied to uncertainty on Friday adding $6.90, after sellers failed to break 1324 for the 2nd time.

USDJPY found resistance at 107.35 on Friday, on the short-term price remains in an uptrend. 106.75 show’s short-term support for a new buyer attempt higher but a close below starts to set up a possible deeper consolidation.

Good trading from Eightcap.

Sources; CNBC.  All times are AEST

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