Market Summary
Diminished chances of tightening from U.S. and European central banks sent European equities higher for a third consecutive session Friday. Bloomberg reported that the ECB is considering waiting until December to reveal plans for tapering its bond purchases, which sent the Euro lower, helping lift equities. The U.K. market gained as well, following a stronger-than-expected manufacturing PMI, although gains were muted as the Pound rallied strongly against the USD in the afternoon.
The markets got a further boost when the U.S. released weak jobs data which showed that the US economy added only 156,000 new jobs in August versus expectations for 180,000. The unemployment rate also crept up 0.1% to 4.4%. The results caused speculation that the Federal Reserve could refrain from any further interest rate hikes in 2017. Gains were modest, but the NASDAQ closed at a new record high for the 46th time in 2017. It was the best weekly performance of NASDAQ since December 2016 as technology and healthcare took the lead.
Today’s Assets
EUR/USD
The pair has now established resistance at the 1.1900 level, and on Friday it traded briefly above that level before drifting lower. There was a huge spike nearly to the 1.2000 level when U.S. employment data came worse-than-expected, but Euro-Dollar quickly retraced and dropped below the 1.1900 level. It spent the rest of the session moving lower, indicating more downside to come.
Cryptocurrencies
After both Bitcoin and Litecoin hit new all-time highs on Friday, cryptocurrencies turned broadly lower over the weekend. Saturday saw broad based losses across most digital currencies. With Ethereum leading the way with 11% loss, Bitcoin Cash dropped 9.3% as the optimism over the new currency has been waning.
Dow Industrials
The Dow was the best performing major U.S. index, adding 0.3% on Friday. The biggest surprise in the Dow was the underperforming General Electric (NYSE:GE) which outperformed on Friday with 2.4% gain. The Dow itself closed higher for the fourth session in a row as investors shrugged off their geopolitical concerns and gaining appetite for equities.