Friday’s Stong NFP Keeps the Markets on Edge [Video]


Active Trader
Aug 10, 2017
Limassol - Cyprus
Last Friday’s NFP's were surprisingly strong and gave the USD an uplift; stock markets saw a bit of a dip, but later managed to recover. Global equities have generally been boosted on Friday by rising expectations that central banks will keep interest rates at or near record lows to boost economic growth; however, a stronger than expected NFP on Friday turned the tables and dampened expectations that the US Federal Reserve will slash interest rates at its upcoming meeting.

Today, EU bourses edged lower while U.S. stock futures are also trading lower as markets remain uncertain over the course of the Fed’s future monetary policy. So, the question now remains, where are we going from here? It seems the Fed has fewer reasons to cut rates strongly at the moment, even though Donald Trump keeps saying that the Fed does not know what it is doing, and it would cut rates if it knew.

Signs of Recession
Meanwhile, further signs of a global recession are becoming more and more apparent, for example, this morning's industrial production in Germany was down significantly and Morgan Stanley also published a warning out of equities as the growth concerns seem to outweigh the effect of central bank policy easing.

US/Iran Tensions Deepen
Further stress is mounting between the US and Iran which is not giving in to the US in a way they want Iran to. Instead, Iran is using Uranium enrichment as a tool to get the US back to the diplomacy table. On Sunday, Iran announced that it would within hours go over the previously agreed level of uranium enrichment. The move signals that Iran is losing patience with a US deal that has not provided the economic relief it had promised.

Forex Preview: TRY Plummets
TRY lost heavily as the Turkish President Erdogan did what Trump would like to do with Powell. Erdogan sacked his present head central banker, most likely because he wanted to see rate cuts. The TRY could lose further from here on this outlook. The USD held on to most of its Friday gains on Monday but might have a hard time to decide on either direction, until we get more clarity from the fed or the stock markets make a move. Elsewhere, the EUR remained under pressure on a set of disappointing Industrial data out of Germany and could extend declines later in the day.


Gold Inches Higher, BTC Remains Volatile
Gold prices inched higher on Monday following a steep fall in the previous session, as a robust U.S. jobs report pushed the dollar higher, dampening demand for the dollar-denominated metal. Spot gold was last up 0.6% at $1,406.83 per ounce as of 7:55 GMT this morning. It should be noted that XAU/USD fell more than 1% on Friday, marking its first weekly decline in seven weeks. Spot gold could be en route to reclaiming recent highs if stock markets should get into trouble. Elsewhere, BTC continues to see a lot of volatility contraction but holding above 11k. The next move could be quite explosive if volatility expands again.

Watch the video here: