European indices managed to regain some of Thursday's sharp losses amid weaker-than-expected NFP data while US stocks were mixed, says Axel Rudolph, Senior Market Analyst at online trading platform IG.
US economy adds fewer jobs than expected
“US stock indices only saw a short-lived bounce as the US added 209k jobs, less than an expected 225k, in June following a downwardly revised 306k in May. The reading gives the Fed some breathing space with regards to future rate hikes. Nonetheless, according to the CME Fed Watch tool, 92% of participants expect to see another 25-basis point rate high at the 26 July monetary meeting."
Commodities end week on a high
“Commodities such as gas, oil, gold, silver and copper all rallied by over 1% on Friday as the US dollar dropped on weaker-than-expected US Non-Farm Payrolls and as US wages rose more than expected in June."
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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