European Inflation Fell, US Jobs Data Pleased Investors
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Friday’s jobs data in the US, and more specifically, the market reaction to Friday’s jobs data helped stock markets to record their best boost since more than a month on Friday.
Friday’s jobs report
However, Friday’s jobs report was rather… mixed, and spurred a lot of discussions and debates regarding whether the data was soft enough to convince the Federal Reserve (Fed) officials that the inflation battle is over, or it was strong enough to make them further scratch their heads.
US markets
US markets, however, gave a strong positive reaction to Friday’s jobs data. Both the US 2 and 10-year yields fell more than 4% after the data, pulling the US dollar index lower along with them. The S&P500 jumped around 2.30%, while Nasdaq 100 rallied near 2.80%.
Gold
Gold reached our $1880 per ounce medium term target, boosted by lower US yields, which made the opportunity cost of holding the non-interest-bearing gold lower, and increased appetite.
Fed, US CPI data and Jerome Powell speach
Activity on Fed funds futures now price in a 25bp hike at the next FOMC meeting at around 75%, but the Fed has not hesitated to disappoint markets since last year to cool down the optimism and send the stocks to turmoil. So the dovish pricing in Fed expectations make the latest gains a bit bitter-sweet, as the slightest news, or hints that the Fed would not step back from its hawkish tone could vanish the latest rally.
So, this week’s US inflation data will be key in either giving the bulls a further boost or bringing back the bears with revenge.
Jerome Powell will speak on Tuesday, and the US CPI data will be released on Thursday.
On the corporate calendar, the earnings season will kick off with big bank earnings due Friday.
Watch the full episode to find out more!
- 0:00 Intro
- 0:32 Strong NFP, soft wages… US jobs data pleased investors
- 03:36 But did it please the Fed?
- 4:59 Thu’s US inflation data is crucial for market mood
- 6:02 European inflation fell, but…
- 7:21 Crude oil flirts with $75pb
- 8:18 Bitcoin, Ethereum advance
- 8:36 Earnings season kicks off !
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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