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    Strong US labour data support the case of Fed interest rate

    US stocks looked down on Friday while the US dollar strengthened a bit. The US labour market data were mixed. The non-farm payrolls increased in January less than expected totaling 151 thousand. On the other hand, the unemployment surprisingly fell from 5% to 4.9% and the average salary increased 0.5%. On this news the probability of the Fed interest rate hike this year rose to 53% up from 46% before the labour data. The following Fed meeting is to take place on March 16. The additional negative is the lowered financial outlook for LinkedIn social network which made its shares slump by 44%. On this news other web-companies’ stocks fell as well. Facebook stocks lost 5.8%. The trading volume on the US exchanges was 9.4bn shares which is in line with the average for the recent 20 trading days. Last week the Dow Jones index slid down 1.6% while S&P 500 lost 3.1% and fell 5.4%. No important macroeconomic data are expected today in the US.

    European stock indices are falling today for the 6nd straight day which is their longest slide down since last June. The average Р/Е (share price/earnings per share ratio) of Stoxx Europe 600 index fell to 14.2 and some market participants believe the European stocks look alluring again. Meanwhile, the shares of the Randgold Resources gold producer edged up after the company decided to increase its dividends by 10%. Today in the morning the Sentix Investor confidence was released being lower than expected. No more important macroeconomic data are expected today in the EU.

    Nikkei index slightly edged up today sneaking the 4-days losing streak. This happened amod the slight yen weakening and the strong corporate data. The builder Totetsu Kogyo Co. raised its earnings outlook and its stock advanced 9.3% which had a positive influence on the whole sector.

    In China the lunar calendar New Year holidays are being celebrated. Most of Chinese stock exchanges will be closed for the whole week.

    Gold prices have stopped rising amid the stronger US dollar. These two assets normally have negative correlation. The net longs in gold on COMEX exchange have reached a 3-month high, according to the U.S. Commodity Futures Trading Commission. The copper prices have edged lower given the closed exchanges in China. Its import from China fell in January 1.9% year over year for the 7th month in a row while imports fell 0.8%.

    Oil price fell marginally. Iran has increased its oil production by 300 thousand barrels a day and is planning its further increase up to 500 thousand. The more active fall in prices is limited by the OPEC plans to agree upon the oil production cuts. The matter is being discussed in the course of the oil ministers of Saudi Arabia and Venezuela meeting. In the US 31 oil rigs became inactive in a week which is their major fall since last April. Now 467 oil rigs are being active in the US while one year ago the number was 1140 units. The U.S. Energy Information Administration expects the US oil production to contract from 9.4mln barrels a day in 2015 to 8.7mln in 2016 and 8.5mln in 2017.

    Soy prices receded amid the wet weather in Argentina which may enhance the crops. Wheat fell in price when Egypt cancelled the wheat tender. Tomorrow the USDA will release the Grains report that may influence the grains prices.

    Cotton went down in price after the National Cotton Council reported its sowings increased by 6.2% in the US. The cotton planting acreage rose 5.8% in 2016.

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