Monday Morning Markets

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This morning, all the Asian markets are trading up with the Hang Seng and Kospi trading higher by 2% each while Nikkei is up 1.7%. Taiwan and Strait Times are up by 1.3% and 1% respectively. Shanghai is marginally in the green.

On Friday Wall Street rallied as a stronger-than-expected July jobs report helped lift markets for the week. The Dow Jones surged 217 points, or 1.7%. S&P 500 and Nasdaq both added about 2%. All three indexes had been headed for a losing week before Friday’s jobs report. U.S Stocks pushed to three-month highs, snapping a four-day losing streak, after jobs report was better than anticipated but still left the door open to additional Federal Reserve measures to stoke growth.

The U.S. economy added 163,000 jobs in July, an improvement from an increase of just 64,000 in June, according to a government report. Economists surveyed by CNNMoney were predicting 95,000 jobs were added last month. Also, the Institute for Supply Management said its index of activity in the services sector increased to 52.6 in July from 52.1 in June.

European markets gained also amid renewed investor confidence in the European Central Bank’s (ECB) determination to bring to an end the region’s long-running debt crisis. Britain’s FTSE 100 rose 2.2%, DAX in Germany added 3.9% and France’s CAC 40 moved up 4.4%

EU shares rose to their highest level in four months, led by gains in bank stocks, as investors said the European Central Bank’s pledge to tackle the region’s debt crisis had bought breathing space for troubled economies.

The US Dollar fell at the end of the week as better-than-expected US jobs growth in July and hopes that European authorities could contain the region’s  debt crisis had investors embracing risk, causing the biggest one-day gain in a month for the Euro.

 Among the metal prices, Nickel lost the most (1.2%) while Copper and Aluminum fell by 0.95 and 0.8% respectively. Zinc ended marginally in the red.   

Oil for September delivery rose $4.12 to $91.25 a barrel but dipped again in Monday morning trading

Gold futures for August delivery rose $15.10 to $1,605.80 an ounce

Disagreements within the 17-nation euro area are undermining the future of the European Union, said Italy’s Prime Minister Mario Monti as the stand-off on European Central Bank support for Italian and Spanish debt hardened. Greece and its international creditors agreed on the need to strengthen policy efforts to support the economy and comply with its bailout terms after more than a week of meetings in Athens.

The trade deficit in the U.S. probably shrank in June as cheaper oil reduced the import bill and slower global growth led to reduced demand for American-made goods, economists said before a report this week.

The outcome of the Aug. 2 European Central Bank meeting is “an important step forward for the common currency  and for spreads,” Bank of Italy Governor Ignazio Visco told daily la Repubblica in an interview.

The yen and dollar declined against most of their 16 major counterparts as Asian stocks extended a global rally, sapping demand for the currencies as havens. 

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About:FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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