The market is poised once again to start the week in a positive mood after strong jobs data in the US helped keep stock markets driving higher. Earnings data missed expectations but the combination of a strong Non-Farm Payrolls number and increased optimism on the US-China trade front helped global stock indices again finish the week well in the black. The dollar remained relatively well bid through the course of Friday’s trading and opens this week within striking distance of the yearly highs, Dxy trading around 97.40 on the open today. Major currencies remained relatively subdued with the pound the stand out mover as it once again dipped to the 1.3000 level as little progress seemed to be made on a Brexit deal between the Tories and Labour. Oil gained more ground with fighting in Libya increasing and threatening the oil supply situation, WTI now up at $63.4/b and Brent breaking through the $70 mark, currently trading at $70.7/b.
It’s another key week for financial markets ahead with the long running Brexit and Trade negotiations still top of the list for investors in terms of potential market drivers. Brexit looks to present the most potential for volatility with little in the way of agreement from any of the parties involved seeming to be coming anytime soon and with yet another deadline fast approaching. The US-China trade negotiations appear to be moving ahead well, however the market seems to be ambivalent to the continuous positive remarks that both sides are now making and is still seeking clarity on the details of a deal and when it will be signed. The short term pattern of more topside for equities and risk now seems set, with no fresh bad news being seen as positive from the market, however some participants remain wary and are struggling to justify recent moves with the plethora of growth warnings that seem to hit the market on an almost daily basis.
Looking ahead to today’s trading sessions and it’s a quiet start to the week on the economic calendars. There’s little in the way of tier 1 data due out over the course of the day and therefore investors will be preparing for a relatively quiet yet upbeat start to the week. Australian traders will be paying close attention to the latest job ads numbers early in the Asian day but there’s not much due after that and European investors will look at the German Trade Balance numbers early in that session. The focus will move briefly to Canada on the New York open with the latest Housing Starts and Building Permits data, but overall expect sentiment to remain the main driver over the course of the day.