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XTB TRADEBEAT

Up, up and away for US stocks; USD remains under pressure ahead of NFP

Summary:

  • US stock markets hit yet another all-time high
  • USD fails to gain despite large ADP beat
  • Biggest draw since August for DOE as Brent Oil trades near 30 month high
  • UK services PMI makes small gain; GBP mixed
  • Ripple surges above $3 as but Bitcoin falls back
  • NFP preview

The start of the New Year has been pleasing for equity bulls with US markets already moving above last year’s peak and into uncharted territory. Shortly after the Wall Street open all three major US indices are trading at levels hitherto unseen with the Asian and European indices making strong gains during their cash hours.

A stronger than expected reading in the ADP employment change has raised hopes ahead of tomorrow’s NFP report and provided another positive data point for the US dollar after yesterday’s ISM manufacturing PMI beat forecasts. This afternoon’s print of 250k was well above the 191k expected and also marked a large increase on the prior reading of 185k (revised down from 190k). Despite this the Greenback has been hit with some selling and has fallen lower on the day. 

The weekly DOE Oil inventories have shown yet another large drop with the immediate reaction in the crude markets being a rise with Brent moving back above the $68 handle to trade not far from its highest level since the summer of 2015. The headline reading of -7.4M was the biggest drop since August and marks a 7th straight weekly decline in US stock piles.

As opposed to the previous PMIs published earlier this week (both manufacturing and construction contracted to some extent in December) the paramount services PMI turned out to be a notch better than forecasts making an increase compared to the prior month as well. The Pound is fairly mixed on the day by the European close rising against the US dollar but falling back against the Euro by a similar amount. 

Just a day earlier we wrote about a possibility of a continued rally in Ripple and after 24 hours later one can say that it did so. In the wake of a mind-bending increase registered during the past hours Ripple has already become the second largest cryptocurrency in terms of capitalization decisively surpassing $100 billion. However, it’s a different story with Bitcoin with the market running into some resistance of late and trading lower by around 1% on the day. 

Tomorrow’s NFP report is the highlight of the week as far as economic releases are concerned and an in-depth preview of the event can be found here. Another market that can be highly sensitive to the NFP number is Gold and our latest technical overview focuses ont he precious metal. 

 

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