The end of a holiday week for markets in Asia. We have to wait until Monday to see mainland China, South Korea and Hong Kong’s reaction to the US NFP’s release and also the reaction to the turn of the US Dollar Index. Markets that were opened were seeing futures initial response trading firmer as the US number is ‘accepted’. Lets just concentrate on the afternoons events, as it only feels the markets just smelt the coffee and woken-up – now that the weekend is upon us!
The alarm clock came in the shape of a negative headline number to the US No-Farm Payrolls at -33k, with a 13k upward revision to previous release. Unemployment rate (September) came in 4.2%, participation rate 63.1% and a +0.5% average hourly earnings increase. The response was higher bond yields, stronger US Dollar, weaker oil (probably because of the USD strength), marginally weaker gold price – although the bias remains negative. Still, many question this US rally and even more are awaiting (or hoping for) a pullback. This remains the most unloved rally in years and now the market questions, ‘Is the FED about to get the blame for ending the anguish’! We won’t hear until December, but meanwhile the continued speculation on who gets next FED Chair remains a top talking point.
This post was published at Armstrong Economics on Oct 6, 2017.
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