Post Comments- US NFP Data

Post Comments- US NFP Data

What a number, it was completely unbelievable and no one was expecting and now July meeting may just become live again. The number is known to be fickle in nature but this is beyond words because if we compare this number to last month’s number, it just makes you even more confused. The number can be smoothed by using three months average which has a reading of 147K.

The average hourly earnings data was not that promising and the tug of war will continue between the market participants.

Perhaps it may not be bad idea not to burn that Dot Plot which the market have been following. Today’s number was very important because the US labour market has been dwindling since the start of this year. By comparing today’s number to previous month, investors are still not sure that whether the frailty in the labour market is due to the labour market maturing or perhaps economic headwinds becoming a lot more stronger.

By looking at the fundamentals and especially after the Brexit vote, the general sentiment in the market is very fragile and hence we are seeing that the central banks are trying to assure the market they are ready to provide their support.

Looking ahead

We have crossed the biggest hurdle in terms of economic data and now there will be a lot more data which the market will digest next week and that data may also serve as a balm for the current economic situation. Having said that, July meeting may just pick up some steam under the circumstances. By looking at the FOMC minutes, it was evidently clear that the Fed members are very much divided and they are using every single excuse on the card to not to increase the rate.

GOLD

The assurance of more QE by central banks inflated the gold price and kept it solidly higher from its support of 1300 and we still maintain that the target of 1400 is highly likely in the coming months as the consequences of Brexit will become more apparent in the coming days.

Dollar

Traders are enjoying the relief rally as the chances of Fed increasing the rate have become a little more stronger but still may face strong headwinds in the face of heightened global growth recession. Over the last couple of years we had Very Very modest growth and this is hurting the central banks to bring the rates to their normal levels.

ENDS

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