Once again trade talk between the US and China dominated market moves on Friday overshadowing a weaker than expected NFP number which nevertheless saw the greenback retreat against most of the other major currencies. China responded strongly to President Trump’s calls for another $100 Bio of tariffs and this led to further volatility and downside to the global equities markets, the Dow finished the day down 2.34% with the other US indices following closely on it’s heels.
Other markets followed the risk off sentiment but we are starting to see a lessening in the severity of the moves especially in the FX market where even the market is looking for confirmation of action before committing to a trend.
The headline NFP number of 103k was much lower than the expected 185k and the Unemployment rate remained steady at 4.1% which would normally place significant pressure on the dollar, however the Earnings numbers came out strongly as expected and Fed members stuck to their consistent recent rhetoric that gradual rate hikes are still appropriate.
The market focus will remain on the continuing ‘Trade War of Words’ that has been dominating moves for the last few weeks and traders will be closely monitoring the news wires for the next chapter. It’s very quiet in terms of fundamental data releases today with really only the BOC Business Outlook a potential market mover coming out in the New York session. This should allow for more steady trading conditions and maybe a chance for the markets to consolidate at new levels before the next twist in the Trade turmoil comes through.