US jobs data and trade-talk progress fuelled a week end rally

Last week's trade ended on a bit of a high note. Following several volatile days, US equities surged on Friday night

A positive end to a volatile week

Last week's trade ended on a bit of a high note. Following several volatile days, US equities surged on Friday night, following the release of US Non-Farm Payrolls data, and the reporting of some positive trade war news. It fostered a risk on atmosphere in markets, and that's setting up a strong start for the ASX 200 this morning. Also, one for the bulls: oil market fundamentals were strengthened by OPEC+ plan to cut global crude production. Turning to the week ahead, and it's going to be huge, with several key events highlighting the market-calendar – and raising the prospect another breakout in price volatility.

US jobs numbers keeps confidence in US economy

It was one of those prints that could aptly be described as “Goldilocks”: US Non-Farm Payrolls showed a bumper print, allaying some levels of concern that the US economy is winding down for this cycle. The data revealed an additional 266,000 jobs were created in the US last month, well above market expectations, and that the unemployment rate fell back to a 50-year low of 3.5%. Crucially, too, wage growth came in a little softer than expected. It printed slightly lower last month, at 0.2%, keeping the risk for an inflation out-break, and therefore a Fed rate cut next year, relatively low.

Trade-talks progress still be assumed

Good news was also received on the trade-war front on Friday – and it came from both sides. News flowed through the market on Friday that Chinese policymakers are in the process of waiving certain, existing tariffs on US soybean and pork products. The good vibes engendered by that story was supported by comments made by Trump trade advisor Larry Kudlow, that trade-negotiators are working “around the clock” and that “progress has been made” on the trade-war. Both news-stories boosted hopes that some sort of “phase-one” trade-deal remains on the table, and the next round of tariff-hikes, scheduled for December 15, will not go ahead.

Market’s loaded up on risk to end last week

The price action in response to the US jobs print, and trade-war developments, was undoubtedly bullish. US equities went on a tear, with the S&P 500 climbing 0.91% , and towards new record-highs. European equities also received a considerable bump to end the week. US Treasury yields leapt, and that supported a rally in the US Dollar, which had suffered falls earlier in the week as-a-result of the perceived deterioration in US-China trade-talks. Gold prices dropped because of the stronger greenback and higher yields, shedding almost 1%, as industrial metals and other growth sensitive commodities broadly climbed.

ASX set to open higher, after a down-week

North American markets’ bullish close has set-up the ASX200 for a positive start to the week. SPI Futures are suggesting the benchmark index ought to open around 35 points higher this morning. The ASX finished on a fairly positive note on Friday, however, it proved of little consequence in the broader scheme of last week’s trade. The trade-war induced volatility saw the ASX200 drop over 2% over the course of the week. Despite this poor performance for Aussie equities, and what are some sketchy fundamentals, the trend is still pointed to the upside for the ASX, with new record highs for the market still in reach.

OPEC+ pledge to cut oil production

Price action in oil markets was notable on Friday, too. In part supported by the prevailing bullish sentiment in the market to end the week, crude received a lift after OPEC+ announced it planned to cut production by around 500k barrels per day. Though that figure alone was considered rather piecemeal, Saudi Arabia pledged to cut its national production, in a bid to ensure that the projected oversupply of oil in the global economy in 2020 is avoided. The news saw Brent Crude prices spike 1.6% on Friday, to trade at levels not seen since September’s price spike.

Will this week prove to be 2019’s Grand Finale?

Last week’s trade was defined by a long-awaited return of market volatility; and that theme may well persist into the week ahead. It’s going to be a big one for global markets, and might prove to be 2019’s grand finale. The market will be positioning for a handful of risk-events, that could equally shift trader sentiment, just as much as macroeconomic fundamentals. The US Federal Reserve and European Central Bank meet on Thursday morning and Thursday night, respectively. The UK General Elections will be held practically on the same day. And the trade-war will remain in focus, with tariff hikes still scheduled for the 15th.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.