Stocks surge after US jobs report

Chris Beauchamp IG

The week is ending in bullish form, as once again US job numbers revive the flagging bull market and prompt a broad bounce in risk assets.

NFPs deliver a shot in the arm for stock markets
Greenback bolstered on job numbers
Oil rallies following OPEC and NFPs

Job numbers beat forecasts, manufacturing payrolls surged and wages have continued to rise. Trump’s victory lap on Twitter today and the exuberant market reaction both seem entirely justified. Once again, stocks have been handed the economic news to power the rally higher. Trade war headlines are the volatility-provoking noise, but it is the drumbeat of good US economic figures and decent earnings that have been the real engine for the S&P 500. The concerns of Monday and Tuesday have been banished, as the equity market rebounds once again. Perhaps 30,000 is too much to hope for by year end, but further gains above 28,000 would be entirely in order for the Dow, while the S&P 500 sets its sights on fresh records too. The news has put new life into a flagging US dollar too, boosting the greenback after a week of declines – there can be few people left now expecting a rate cut any time soon, let alone next week.

OPEC might look at a crude oil chart and kid themselves that their cuts, which were admittedly deeper than forecast, occasioned the surge in oil prices, but it is the hope of more economic growth that will provide the real bull case for oil into 2020. As PMIs around the globe begin to turn higher, supported by looser central bank policies, we should see demand for oil pick up as GDP growth accelerates.

Author

Chris Beauchamp

EUR/USD climbs to daily highs on US CPI

EUR/USD now accelerates it rebound and flirts with the 1.1880 zone on Friday, or daily highs, all in response to renewed selling pressure on the US Dollar. In the meantime, US inflation figures showed the headline CPI rose less than expected in January, removing some tailwinds from the Greenback’s momentum.

GBP/USD clings to gains above 1.3600

GBP/USD reverses three consecutive daily pullbacks on Friday, hovering around the low-1.3600s on the back of the vacillating performance of the Greenback in the wake of the release of US CPI prints in January. Earlier in the day, the BoE’s Pill suggested that UK inflation could settle around 2.5%, above the bank’s goal.

Gold: Upside remains capped by $5,000

Gold is reclaiming part of the ground lost on Wednesday’s marked retracement, as bargain-hunters seem to have stepped in. The precious metal’s upside, however, appears limited amid the slightly better tone in the US Dollar after US inflation data saw the CPI rise less than estimated at the beginning of the year.