Daily Digest: Friday 5th April
USA
As it was the first Friday of the month, the US Unemployment and Non-Farm Payroll figures for March were released. Non-Farm employment levels rose by 303,000 against analyst expectations of 212,000. This indicates stronger than anticipated domestic job market expansion, which as noted last month has inflationary undertones. Higher levels of employment lead to a tightening of the job market, increasing the bargaining power of prospective employees, who are able to demand higher wages for their services. Naturally, businesses must compensate for any additional costs incurred during the production and provision of goods and services, which are more often than not pushed onto the end consumers. Additionally, higher employment rates increases the demand for goods and services within an economy, as jobs provide salaries which are stable income streams, allowing individuals to increase personal expenditure. Total US unemployment figures failed to calm inflationary narratives, with March figures indicating a decline in unemployment from February, with the current rate at 3.8%, some 0.1 percentage points lower than analyst expectations.
Market reactions to the employment prints were positive, as the major indexes moved to erase Thursday afternoon’s losses. The Nasdaq 100 ($NDX) led gains, rising 1.28% and once again breaking above the 18,000 level to close at 18,108.46. The S&P 500 ($SPX) followed closely behind rising 1.11% to 5,204.34, while the Dow ($INDU) rose 0.80% to 38,904.04.
Europe
FTSE 100 (FTSE) losses slowed throughout the session, as UK markets priced in Thursday afternoons US equity declines and Friday’s employment data. FTSE prices fell as low as 7,884 before rebounding to 7,911.16 by the close, indicating a 0.81% decrease. Halifax’s UK house price index figures for March released, indicating that house sale prices had fallen 1%. Despite figures being somewhat harsher than Nationwide’s Tuesday print, the general signal of weaker property market activity remains.
Across the channel, the STOXX 600 (€SXXP) fell 0.84% to 506.55, while the DAX (€GDAXI) fell 1.24%, and CAC (€FCHI) fell 1.11% to 8,061.32.
Rest of the World
The Nikkei 225 (¥N225) failed to exploit upside momentum, emulating Thursday’s US market direction, as index prices fell 1.96% to 38,992.08. The Yen which has been central to FX analysis through March has remained at the centre of attention, as the currency continues to appreciate against the US dollar, falling to ¥151.59 as of 17:45 GMT, trading up off its intraday lows of ¥151.75. Possible BOJ intervention in the currency markets remains a contentious topic as traders remain cautious on the pair, with officials unlikely to accept any move upwards of the ¥152 level.
As noted yesterday, Chinese markets were closed for the second day running as the nation celebrates Qingming (Tomb-Sweeping day). The Shanghai Stock Exchange Composite Index (¥SSE) will open Monday trading priced at Wednesday’s closing level 3,069.30. The Indian Nifty 50 (₹NSEI) fell <0.01% through Friday’s session, the index now priced marginally under Thursday’s close at 22,513.70.
Commodities
Crude Oil traders continued to benefit from upward volatility caused by growing uncertainty across the Middle East, as the ongoing war between Israel and Hamas threatens the stability of relationships across the region. Notable escalations include an IDF strike on the Iranian embassy in Syria earlier this week, alongside an accidental strike by Israeli forces on a volunteer aid convoy within Gaza on Thursday. Drawing Iran into conflict will have significant Crude supply implications, the nation being a large exporter to the Asian market. This weeks military operations have highlighted the insignificance of geographical borders and boundaries within the conflict, as Syria, another crude exporter appeared briefly in the firing line. Through Friday’s session crude continued to rally, rising 0.17% to $86.74 per barrel as of 21:00 GMT.
A minor consolidation of prices through Thursday failed to influence momentum through Friday, as Gold prices rose 1.455% to $2,342.10 per ounce as of 21:00 GMT. The commodity broke previous all-time highs at its intraday peak as investors benefitted from strong US employment figures and a weakening of inflationary pressures across the US economy. As noted toward the end of last month, a decrease in interest rates reduces the opportunity cost investors face when holding gold, as the coupon rate on other ‘risk-free’ assets is reduced.
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice