Stocks Rally After Weak NFP – Nasdaq up 2%
US Stock markets rallied strongly on Friday after a weaker-than-expected non-Farms employment data print pushed back on higher for longer Fed rates. The Dow jumped 1.18%, the S&P 1.26% and the Nasdaq rose 1.99% by the close of trading. US Treasury yields took another step back, the 2-year dropping 6.5 basis points to 4.812% with the benchmark 10-year falling 6.9 basis points to trade down towards multi-week lows at 4.501%. The dollar dropped again against the majors, the Dxy losing 0.21% on the day to trade back to 105.08 and Oil completed its worst week in 3 months with Brent and WTI dropping 0.85% and 1.06% respectively on the day. Gold also failed to rally despite a weaker greenback, dropping 0.1% to close around the $2,300 mark.
Oil Under Pressure as Demand Concerns Weigh
Oil prices finished last week well on the back foot as demand concerns and declining geopolitical risk premiums combined to see Black Gold experience its sharpest weekly loss in 3 months. Despite a lower employment print on Friday, investors are still concerned about higher for longer rates in the US, the world’s biggest oil consumer – and their consequent effect on demand. Geopolitical concerns in the Middle East are starting to pull back as Israel and Hamas look to be closer to a ceasefire with talks ongoing with international mediators. Traders will continue to monitor updates closely as we progress through the week, which is relatively light on data, especially out of the US. WTI did break through a key technical support line last week and it could open with way to further downside moves if we do not see a change in the fundamentals in the next few sessions.
A Positive Start to a Quiet Trading Week
The week once again looks set to start on a positive note for Asian markets after Wall Street surged higher on Friday. Investors are taking hope from a slightly more dovish outlook for US rates and what has been a relatively strong earnings reporting session. There is very little on the event calendar to change that sentiment initially today and the week is certainly much quieter from an event risk perspective which could encourage smoother trading conditions. Japanese markets are closed today which could once again effect sensitive Yen liquidity and there are no tier 1 data releases scheduled in any of the sessions. The UK is also off today to celebrate May Day which will also affect liquidity in the European session. Swiss traders will be on their toes midway through the session with the SNB Chairman Thomas Jordan set to speak in Basel, but apart from that it looks to be a relatively quiet day ahead.
