Disclaimer: The information and opinions in this report
are for general information use only and are not intended as an offer
or solicitation with respect to the purchase or sale of any currency or
CFD contract. All opinions and information contained in this report are
subject to change without notice. This report has been prepared without
regard to the specific investment objectives, financial situation and
needs of any particular recipient. Any references to historical price
movements or levels is informational based on our analysis and we do not
represent or warranty that any such movements or levels are likely to
reoccur in the future. While the information contained herein was
obtained from sources believed to be reliable, author does not guarantee
its accuracy or completeness, nor does author assume any liability for
any direct, indirect or consequential loss that may result from the
reliance by any person upon any such information or opinions.
Daily Market Commentary: (Evening Report)
London close: Footsie struggles to hold on to gains after jobs data
Market Movers
- techMARK 2,104.52 -0.28%
- FTSE 100 5,868.55 +0.11%
- FTSE 250 12,120.83 +0.24%
- US jobs provide temporary boost, but gains trimmed
- Data unlikely to change Fed's stance, says analyst
- Financials Admiral and RBS disappoint
While the closely-watched US jobs report provided a bit of a bounce in early afternoon trade, the Footsie had pared gains to finish flat by the close as the initial euphoria surrounding the figures died away.
US non-farm payrolls rose by 171,000 last month, well above the 125,000 expected by the market consensus. The unemployment rate did increase, by 10 basis points to 7.9%, but this was expected.
What's more, upwards revisions were made to previous months' figures which added "more lustre to an already-solid report", said analyst Michael Gapen from Barclays Research.
The Footsie jumped to an intraday high of 5,888 shortly after the data was released, but quickly came pulling back to its starting point after US stock markets opened. "Despite the better numbers the initial gains proved to be somewhat short-lived as markets fizzled out like a damp firework ahead of the weekend and the outcome of next week's US elections," said market analyst Michael Hewson from CMC Markets.
Barclays Research's Gapen said that the labour market is exhibiting good momentum heading into Q4, "although we would not be surprised to see some volatility in upcoming jobless claims and payrolls as a result of Hurricane Sandy. We do not see the momentum in hiring and decline in the unemployment rate in recent months as changing the calculus for the Fed at this stage."
In domestic, the UK economy is not expected to contract this year, but ill-timed fiscal consolidation in Europe and other external risks continue to pose risks, the National Institute of Economic and Social Research (NIESR) said in its latest quarterly forecasts.
The British economy is now expected to grow by 0.1% in 2012, which marks a slight upwards revision on its previous forecasts. Next year however the external environment is no longer being forecast to make a contribution to aggregate demand, leading the NIESR to reduce its forecast for gross domestic product (GDP) downwards, to 1.1%, as net trade will not make any positive contribution.
- Data unlikely to change Fed's stance, says analyst
- Financials Admiral and RBS disappoint
While the closely-watched US jobs report provided a bit of a bounce in early afternoon trade, the Footsie had pared gains to finish flat by the close as the initial euphoria surrounding the figures died away.
US non-farm payrolls rose by 171,000 last month, well above the 125,000 expected by the market consensus. The unemployment rate did increase, by 10 basis points to 7.9%, but this was expected.
What's more, upwards revisions were made to previous months' figures which added "more lustre to an already-solid report", said analyst Michael Gapen from Barclays Research.
The Footsie jumped to an intraday high of 5,888 shortly after the data was released, but quickly came pulling back to its starting point after US stock markets opened. "Despite the better numbers the initial gains proved to be somewhat short-lived as markets fizzled out like a damp firework ahead of the weekend and the outcome of next week's US elections," said market analyst Michael Hewson from CMC Markets.
Barclays Research's Gapen said that the labour market is exhibiting good momentum heading into Q4, "although we would not be surprised to see some volatility in upcoming jobless claims and payrolls as a result of Hurricane Sandy. We do not see the momentum in hiring and decline in the unemployment rate in recent months as changing the calculus for the Fed at this stage."
In domestic, the UK economy is not expected to contract this year, but ill-timed fiscal consolidation in Europe and other external risks continue to pose risks, the National Institute of Economic and Social Research (NIESR) said in its latest quarterly forecasts.
The British economy is now expected to grow by 0.1% in 2012, which marks a slight upwards revision on its previous forecasts. Next year however the external environment is no longer being forecast to make a contribution to aggregate demand, leading the NIESR to reduce its forecast for gross domestic product (GDP) downwards, to 1.1%, as net trade will not make any positive contribution.
Europe Market Report
Europe midday: Europe stands pat while waiting for US Employment Report
-Investors waiting on US employment report
-Eurozone manufacturing sectors slightly above consensus, but in contration
-Alcatel plunges after reporting Q3 losses
-Beiersdorf lifts revenue outlook
-Rumors that Deutsche Telekom to cut dividend
FTSE-100: -0.09%
Dax-30: -0.14%
Cac-40: -0.02%
FTSE Mibtel 30: -0.60%
Ibex 35: +0.50%
Stoxx 600: +0.16%
After yesterday's 1 per cent rise, European equities on the average decide to take a breather and trade flat with a mixed balance while waiting for the latest monthly employment report Stateside to come out at 12:30 London time.
Yesterday's better-than-expected US labor market data (weekly initial claims and the ADP employment change) already gave the European benchmarks a leg up, but it seems even the bulls prefer to wait for a confirmation from the "official" data before making another move.
Also of interest, in today's Financial Times James Mackintosh tells readers that recent market moves –gains led by cyclicals- show that there is quite a bit of optimism regarding economic growth. In his opinion, however, that is only justified if one believes that central banks have more ammunition left in their armouries –or not- as Governor King has recently suggested.
Other considerations to be taken into account by the shortest-term investors and traders are that the last two months of the year are usually amongst the best for equities and the still relatively "bearish" sentiment (as a contrarian indicator) of small investors, according to the latest weekly survey data out from AAII.
Eurozone PMI slightly ahead of forecasts
While waiting for the US macro data (apart from the Employment Report, we'll also see the New York ISM and factory orders), we've had a barrage of manufacturing sector come out from the Eurozone. In general terms, both the individual countries and the sector as a whole narrowly beat forecasts. However, it should be noted that all of the readings remained below 50, implying a contraction in the sector.
The Markit Eurozone purchasing managers index for the month of October
has come in 45.4, versus last month´s reading of 46.1 (Consensus: 45.3).
The Markit German purchasing managers index for the month of October
has come in 46, versus last month´s reading of 47.4 (Consensus: 45.7).
The Markit French purchasing managers index for the month of October
has come in 43.7, versus last month´s reading of 42.7 (Consensus: 43.5).
Single currency dropping towards technical support ahead of data
The euro/dollar is now down by 0.48% to 1.2885.
Brent crude futures are off by 0.14% to $109.40.
US Market Report
|
No comments:
Post a Comment