Banks and miners lead FTSE
The FTSE 100 has said hello once again to 6700, after dropping below this level almost a month ago. This morning’s gains have firmed up across the board and we’re seeing banks and miners lead the charge. The US jobs report, which reported an increase of 192,000 in March, was strong for doves, since it came in below expectations, but also for those firmly in the ongoing economic recovery camp. Airlines are also doing well this afternoon, thanks to strong passenger numbers from easyJet, with International Consolidated Airlines and Flybe rising along with the orange-coloured airline.
ASOS is, however, firmly out of favour as the week ends, dropping below £50 for the first time since October last year. We witnessed a sharp fall yesterday, a day after results showed the firm was looking to expand further into new markets. The loss of the £50 level wipes out months of gains, and dashes the hopes of those that thought we’d see £100 in short order.
Dow sneaks above 16,600
The afternoon has witnessed the Dow Jones sneak back above 16,600 for the second consecutive day. The US reaction to non-farms has been less enthusiastic than on the FTSE 100, but both the Dow and the S&P 500 are ahead of the UK in percentage terms for the week, up 1.8% and almost 2%, versus 1.3% for the main UK index. The jobs report had some of the shine taken off it by the unemployment rate, which held steady at 6.7%, although upward revisions to January and February did help. The upshot is that tapering will continue unabated, but markets have learnt to cope with this status quo and are unlikely to be troubled by it as we head into the new week. Attention will be focused on the Dow as we wait to see whether this index can properly break through the highs around 16,600 seen at the beginning of the year.
Non-farms prompts gold rally
Today's non-farms have prompted rallies in both gold and silver, with the former briefly pushing above $1300. The yellow metal appears to have focused on the number for March, which was below expectations, ignoring the higher revisions for February. The slight mistipped the scales towards a dovish interpretation, and this has dragged gold upwards, with silver tagging along to the ride. If we can break through $1300 then $1330/$1340 is back in the frame as the commodity looks to build on its bounce from the 100-day moving average.
Aussie racing towards $0.93
The doves have driven USD/JPY lower this afternoon, as knee-jerk reactions to the mildly weaker jobs data comes through. It appears that the US economy has not come roaring back in March, so the move towards ¥105 has been stopped for now. Meanwhile, the Aussie is racing towards $0.93 and, if it pushes above the high seen on Tuesday, it will be in territory not visited since late November last year. Chinese stimulus news yesterday and now a dovish non-farms reading has put the seal on a good week for the currency, with $0.9450 potentially the next target.