IFC Markets - Analytics

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    Awaiting US non-farm payrolls

    US stocks were looking down on Thursday on modest forecasts from retailers. The Ralph Lauren shares slumped 22% while Kohl’s lost 18.4%. The data released on Thursday showed that the non-farm productivity edged lower in Q4 while US factory goods fell in December as well. Investors are longing for bullish drivers but the reality falls short of expectations. Today markets are focused on the US non-farm payrolls and unemployment rate. The US non-farm payrolls data normally indicate the strength of the US economy. The US dollar is heading for a 3.5% loss this week. The US dollar index, a measure of a greenback’s value against a basket of major currencies, closed 0.8% lower at 96.640 on Thursday having touched overnight the lowest since October at 96.259 and analysts believe there is room for its further decline. The Dow Jones Industrial Average index added 0.46% while Nasdaq fell 0.12%. The S&P 500 fell 0.07% to 1,911.15 with 5 out of 10 its sectors being in the black and basic materials being the top performer. Freeport-McMoRan stocks rallied 17.9% on rebounding commodities prices, especially copper. Alcoa Inc. added 10.06%.

    European stocks dipped on Thursday as investors were concerned with weak US data that may point on slowdown in the world’s major economy. The EURUSD rate fell 0.2% to $1.1188. The UK’s FTSE 100 closed 1.06% higher, the France’s CAC 40 was almost flat rising 0.04% while the Germany’s Dax 30 index lost 0.44%. The pan-European FTSEurofirst index lost 0.15% in volatile trading with Credit Swiss being the bottom performer. The bank’s shares tumbled 10.9% after posting the first full-year loss since 2008. STOXX 600 slid down 0.2% to 328.8 points while UBS bank revised down its outlook for the index performance by the end of this year by 8% to 400 points. On the other hand, the Dutch ING bank’s shares rose 8.9% after posting the surprisingly strong Q4 earnings data. Export-oriented carmakers lost 2.7% altogether, with Daimer falling 3.2% on modest earnings data after the lucrative 2015. Nevertheless, the losses in the European market were limited by the rebound in commodities. The biggest profits were recorded in the mining ( 7.3%) and energy ( 3.3%) sectors as weaker US dollar made the dollar-priced oil cheaper for other currencies holders. Royal Dutch Shell stocks edged up 6% despite weak earnings data.

    Asian stocks were looking down on Friday with Japan’s Nikkei 1.4% down. The analysts make guesses whether the US dollar will further lose its value against the yen. Markets are awaiting the US jobs report to have a better understanding of what to expect. The USDJPY exchange rate was almost flat at 116.745 yen having lost 1% overnight.

    Oil futures prices were oppositely directed. WTI oil futures rose 0.2% to $31.79 a barrel but are still on track to lose 5.4% this week. The oil rebound was triggered by the weaker dollar but oil remains under pressure amid the global economic slowdown concerns. Brent crude futures lost 0.2% to $34.41 a barrel and are to end the week 1% down.

    Spot gold has verged its 3-month high at $1.157.20 an ounce. The gold was rising in price on weaker dollar and the fading prospects for the interest rates hike by the Fed in the nearby future.

    Three-month copper fell 0.5% in London but is still in the 3-week uptrend supported by weakening US dollar

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