US equities finished in the red on Friday following worse than expected NFP figures which printed 151k vs the expected 190k and experienced a two month net downward revision of 105k. even the better than expected unemployment rate (4.9% vs 5%) and better Average hourly Earnings (0.5% vs 0.3%, which kept the USD bid, could not stop the decline in equities which saw major losses in the IT sector, with downward revisions of EPS causing major bearishness. The DJIA finished – 1.29%, the S&P500 finished down 1.85% and the NASDAQ was pummelled to -3.44%. Today sees little data out of the US and any moves in the USD will be driven by technical levels after Fridays sell off against the dollar.
Statements out of the BOJ continue to be dovish as they reiterate that more action can be taken should it be required, this comes after the recent spurt of strength coming in from the USD which has seen the USDJP trade sub 117. China to showed no respite in their interventions, furthering the dovish sentiment, as they try stem the collapse of confidence, by reiterating that they will continue with prudent monetary policy changes so to maintain the CNY as stable levels. Chinese banks will be close this week in observance of Spring Festival, it will be interesting to see if the BOC takes this opportunity to intervene in markets, giving participants time to digest the news prior to reopening for trade.
Analysts at Citi warned that the current prospects of a BREXIT, which is estimated to be at a 20-30% chance of materialising, is the biggest near term global political uncertainty and would result in painful political and economic environment for the UK and the EU.
Crude oil saw some reprieve to break above $31 overnight, after positive talks between Saudi Arabia and Venezuela were reported. Saudi Arabian oil Minister reported that the two countries had a successful discussion on ways to cooperate in an attempt to stabilize the oil market.
GOLD dropped $7 after the open on touted profit taking after the precious metal reached highs of 1175 post NFP and its best positive week since July 2013.