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Stocks rally after surprise NFP – Week starts in the green trade war takes back seat; Risk continues run to USD – JPY

Jul 9, 2018 | Daily Market Outlook

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Friday night’s U.S employment data turned out to be a be a mixed bag. Positive on the payroll side, stocks rallied. The Dow Jones added 99.74 the S&P500 added 23.21 and the Nasdaq had a great session jumping by 101.96. The Nasdaq climbed 1.3% to 7,688.39 as the iShares Nasdaq Biotechnology ETF (IBB) surged 3.8% and Facebook rose to an all-time high.

Markets looked to shrug off trade worries and focus on positive payroll data. The U.S. economy added 213,000 jobs in June, while economists polled by Reuters expected a gain of 195,000. Average earnings slipped down to 0.2% and the unemployment rate increased to 4.0%.

“I think the report is more encouraging than discouraging because it suggests we have a bit more slack in the economy than we expected,” said Bruce McCain, chief investment strategist at Key Private Bank.”

“The unemployment rate went up for the right reason: more people coming into the workforce,” said Eric Souza, senior portfolio manager at Silicon Valley Bank. ”

The USD retreated post-employment data risk ended the week on a strong note. This week US CPI data will be released on Thursday.

European shares rallied despite trade war fears ending the week higher. The EUR STOXX added 5.74, the DAX added 31.88 and the FTSE closed 14.48. Thyssenkrupp shares rose during afternoon deals to close 2.4% higher after chief Heinrich Hiesinger offered his resignation. Deutsche Bank shares rallied 2.5% higher following a media report that J.P. Morgan and the Commercial Bank of China were assessing the possibility of buying the German lender. J.P. Morgan denied the report, but the shares continued to push higher by the news.

Today, markets have been trading higher. The ASX200 +12.50 – the Nikkei +665.24 –the Hang Seng +411. Trade worries have abated today and U.S jobs data has boosted buyer moral. Risk currencies continue higher in Monday’s trade the AUD 29 pips higher to the USD and 34 pips higher to the JPY. The EUR is higher to the safe havens and the USD is flat to the Yen.

Oil finished Friday 74 cents higher and is slightly higher today. Gold 3.80 higher with support seen at 1254. USD weakness today’s driver.

Bitcoin has gapped higher this morning and most cryptos are higher to paring loses. Bitcoin is currently holding above 6600.

Good trading from Eightcap.

Sources; CNBC – All times are AEST

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