General Market Comment
US indices closed higher on Friday as the Dow jumped by 747pts after the Chairman of the Fed mentioned that the central bank will take its time in raising rates in the near future. Shares in the Media (+4.8%), Semiconductors & Semiconductor Equipment (+4.7%) and Software & Services (+4.38%) sectors gained momentum. On the economic data front, change in nonfarm payrolls grew by 312k in December (estimated 184k) from 176k in November. In other news, the unemployment rate increased to 3.9% in December (forecasted 3.7%) vs. 3.7% in the prior month. Finally, the Markit US composite PMI slightly decreased to 54.4 in December from 54.7 a month earlier while the Markit US services PMI also decline to 54.4 in December (expected 53.4) vs. 54.7 in November. The S&P 500 (2,531.94) remains below its 20d moving average (2,538.91 – negative slope) and 50d moving average (2,645.06 – negative slope).
European markets are expected to start on a positive note.
Foreign Exchange
The US dollar was bearish against most of its major pairs on Friday with the exception of the JPY. On the economic data front, change in nonfarm payrolls grew by 312k in December (estimated 184k) from 176k in November. In other news, the unemployment rate increased to 3.9% in December (forecasted 3.7%) vs. 3.7% in the prior month. Finally, the Markit US composite PMI slightly decreased to 54.4 in December from 54.7 a month earlier while the Markit US services PMI also decline to 54.4 in December (expected 53.4) vs. 54.7 in November.
The Euro was bearish against most of its major pairs except for the JPY. The euro zone CPI growth slowed to 1.6% in December YoY in first reading (+1.7% expected) vs +2% a month earlier. Separately, the euro zone PMI services index was 51.2 in final estimation in December vs 51.4 in first reading and 53.4 a month earlier. The euro zone PMI composite was 51.1 in final reading, its lowest level in four years vs 51.3 expected and 52.7 in November. The Germany unemployment rate was flat at 5% in December, a historic low, as anticipated. The UK PMI composite index increased to 51.4 in December (50.8 expected) from 50.8 a month earlier.
The Australian dollar was higher against all of its major pairs.
Commodities
After the close of Wall Street, WTI Crude Future (FEB 19) was up $1.1 to $48.22. The contract was below its 20D MA (@ $48.28) and below its 50D MA (@ $54.47). The US Department of Energy reported that, for the week ended 28 December, crude oil inventories increased 7k barrels compared to the previous week.
Gold was down $9.1 to $1285.2. The precious metal was above its 20D MA (@ $1263) and above its 50D MA (@ $1239).
Copper Future (MAR 19) on Comex was up 7.4c to 264.25c/lb. The contract was below its 20D MA (@ 269.85c) and below its 50D MA (@ 273.64c). In Europe, the London Metal Exchange reported its copper inventories decreased 0 tons to 132400 tons.