Once again markets have decided that good US news is in fact bad news, as the non-farm payrolls give credence to the thinking that the US Federal Reserve is continuing to edge towards reducing its current $85 billion monthly quantitative easing policy.
Total unemployment in the US remained at 7.6%, but with the Fed having said that the target has always been outlined as 6.5% so there is still some considerable way to go.
This latest setback to the markets has seen our clients reverse their general stance on the FTSE, and now 54% are now short the FTSE.
With the effect that these figures and the last couple of days of economic data have had on the strength of the US dollar. it is no surprise that the mining sector is weighing the index down. Of the top five fallers in the FTSE 100, all are commodity stocks. With the Bank of England and the European Central Bank stating that interest rates in the UK and eurozone respectively will remain low for the foreseeable future, it’s likely that there will remain pressure on commodity stocks for some time.