Collinson Forex - Weekly Market Commentary and Calendar

Weekly Market Commentary

US equity markets roared back in to the black to close a shortened holiday week. The Dow posted another massive gain of over 800 points at one stage. The gains were attributed to a spectacular Non Farm Payrolls number and comments from the Federal Reserve Chairman Powell. The headline unemployment rate popped up to 3.9%, but this was due to rising participation rates, which is a strong signal for the labour market. The NFP number was expected to be 184,000, but the number blew through expectations, adding 312,000! This supported a major confidence boost, while Fed Chair Powell outlined a temperate and patient attitude to monetary policy, which further improved sentiment.

The market rallied strongly on employment data and the Feds dovish statement but the Chinese/US trade talks set for next week in Beijing provides blue sky prospects. The positive attitude of both participants has raised hopes and market prospects. This enabled the beleaguered commodity trade exposed currencies. The AUD jumped to 0.7110 to close the week, while the NZD recovered 0.6740, reflecting a very positive close to the first weeks trade for the year. These currencies are heavily dependent on the trade talks, so next week will be very important.

The coming week will be focused on the trade talks in China and economic data will reflect historical numbers. Central Bank flexibility appears to be on the rise, which will assist share markets across the globe. Bond Yields have retreated, allowing relief to overburdened debt holders and capital hungry industry.