Investing.com – Take a peek at the top 5 things that rocked U.S. markets this week.
Inflation given a lifeline after US wage growth topped expectations
A weaker-than-expected nonfarm payrolls was overshadowed by bullish wage growth lifting expectations for higher inflation, strengthening the Fed’s position to hike rates later this year.
As was widely expected hurricanes Harvey and Irma disrupted labor market activity over the past month as Nonfarm payrolls fell by 33,000 in September, missing consensus estimate of 90,000.
The jobless rate fell to 4.2% while average hourly earnings topped expectations, rising 0.5% from the previous month.
After an initial surge higher following an uptick in wage growth, the dollar turned negative against its rivals but notched a win for the week.
Crude oil prices post weekly drop for first time in four weeks
Crude oil prices settled lower on Friday snapping a four-week winning streak as investor attention shifted to a potential disruption to energy infrastructure in the Gulf of Mexico as Tropical Storm Nate bears down on the region amid renewed oversupply concerns.
The expected arrival of Storm Nate added to oversupply concerns as the widening gap between Crude and Brent prices is expected to incentivize US producers to ramp up production and exports.
Crude oil prices sank below $50 a barrel to settle at $49.95.
Sterling fell as Theresa May’s future as UK Prime Minister was called into question
GBP/USD briefly dipped under $1.30 on Friday, following speculation concerning the future of UK Prime Minister Theresa May after former Conservative Party chairman Grant Shapps urged fellow Tories to join the revolt against May.
May responded insisting that she was providing the “calm leadership” the country needed.
UK political uncertainty comes amid investor concerns over a slump in construction activity as the sector contracted for the first time in 13 months (just after the Brexit market), data showed earlier this week.
Euro suffered selling pressure as talks of Catalonia independence heated up
The euro came under pressure during the week as investors mulled over the outcome of the Catalonia independence vote in which 90% of the 2.26 million Catalans in Spain voted in favour of independence, the region’s government said.
Geopolitical uncertainty in the region was cranked up a notch after Catalonia President Carles Puigdemont said the region will declare independence “in a matter of days”.
Carles Puigdemont is set to address the Catalan parliament on Tuesday regarding the “current political situation”, a spokesperson for the body confirmed today.
EUR/USD rose 0.20% to $1.1734 but remained close to eight-week lows.
Gold fell to 4th straight weekly loss
Gold prices fell for the fourth-straight week, as renewed hopes for tax reform and growing expectations of an additional rate hike this year weighed on sentiment, forcing traders to abandon their bullish bets on the precious metal.
Net bullish bets on gold fell to 203.9, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.
Gold prices could recover some losses, however, should North Korea test-fire a new high range missile capable of hitting the US mainland to mark the anniversary of the founding its ruling communist party.
The Party Foundation Anniversary, in which North Koreans celebrate the founding of its ruling communist party, is due to take place on Tuesday next week.
Gold prices traded at $1,277.09, up 0.31% on Friday.