Weekly Market Commentary Non Farm Payrolls beat expectations and triggered a further surge in equity markets. US Share Markets traded around historical highs after the employment numbers were released. The headline Unemployment rate rose from 5.8% to 5.9%, but was largely ignored by markets, who reacted to the jobs added. The digestion of these numbers will raise questions, both in terms of the Fed's reaction and the reality of the economy. Inflation is now the most important economic indicator.
The labour market number was a negative for the US Dollar, allowing the EUR to rebound to 1.1865, while the GBP stumbles to 1.3830. Commodity currencies gladly accepted the softer reserve, with the NZD pushing back above 0.7000 and the AUD breaking strongly though 0.7500. US Bond Yields remain remarkedly lethargic, but inflation scares will change all of that. EU PPI rose by an annualised 9.6%, which will translate directly into consumer prices, despite the lack of economic growth.
Watch inflation CPI/PPI numbers closely and the re-emergence of the term, 'stagflation'. Weekly Market Calendar 5/7 Australia Construction, Australia Services/Composite PMI, Japan Services/Composite PMI, Australia Building Permits, Australia Retail Sales, Australia Job Ads, China Services/Composite PMI, UK/France/German/EU Services/Composite PMI
6/7 NZ Business Confidence, RBA Rate Decision, German Factory Orders, German/EU ZEW Business Confidence, US Services/Composite PMI
7/7 ISM Non Manufacturing PMI, NZ GDP, German Industrial Production, UK House Prices, US Weekly Mortgage Applications
8/7 FOMC Minutes, Japan Current Account, German Trade Exports/Imports, US Weekly Jobless Claims
9/7 China CPI/PPI, UK GDP, UK industrial Production
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