-1683627206.png)
Muted Action in Markets Following US Jobs - CP In Focus This Week
We’ve seen a rather muted start to the week for equities markets on the back of the volatility seen on Friday. The latest round of US jobs data provoked a sharp rally across the board as investors cheered a solid set of figures. The headline NFP print came in well above forecasts at 253k vs 181k expected. The unemployment rate was seen falling back to 3.4% from 3.6% prior while wages were seen rising 0.5% from the prior month’s 0.3% figure.
The data was a swift response to the growing recession fears which have been dominating discussions recently. With the economy still creating jobs at a solid pace, traders are now left contemplating whether the Fed might push for one more hike next month. Tomorrow’s US CPI data will likely decide given the Fed’s switch to a data dependent stance (focusing on jobs and inflation chiefly).
However, concerns for the global economy remain front of mind today on the back of weak China trade data overnight. Exports and imports were seen dropping sharply in April adding further evidence of an uneven recovery there. While the Chinese economy was seen rising above expectations in Q1, the factory sector has been the laggard with initial Q2 data suggesting this trend continues.
US debt ceiling concerns are also weighing on market sentiment on Tuesday. Yellen warned this week that the US Treasury will run out of cash as of June 1st unless the debt ceiling is lifted. However, Yellen added that there are currently “no good options” for solving the debt limit problem other than to raise it. Biden meets with Congressional leaders today to discuss.
Technical Views
DAX
For now, the market continues to hold above the 15642.76 level, within the broad bull channel which has framed the move off last year’s lows. While current support holds the focus is on a further push higher with the 16278.35 level the next upside target to note.
.png)
S&P 500
The index continues to hover around the 4153.50 level which has been a magnet for price over the last 6 weeks. Momentum studies are flat, reflecting the loss of conviction in the market. However, with the broad bull channel intact the focus is on a further push higher towards 4305 next.
.png)
FTSE
The correction lower in the index found support into the retest of the broken bear trend line and the 7678.8 level support. While this area holds, the focus is on a continuation higher with 8023.5 the next level for bulls to watch.
.png)
DOW JONES
The Down continues to hold around the 33576.05 level for now, sitting within the upper part of the 32072.32 – 34523.58 range. For now, focus remains on a further push higher though flattened momentum studies highlight two-way risks.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.