Positive Payroll Report Drives Stock Market Up

Bull market

American investors are focused on is the publication of October positive data from the US labor market. Nonfarm Payrolls declined less significantly than the market expected, from 180K to 128K. The unemployment rate rose from 3.5% to 3.6% but remained around fifty-year lows. In general, the American labor market remains strong and contributes to the growth of the American economy. However, US President Donald Trump was again dissatisfied with the actions of the Fed, namely, with the hint of a halt in the rate reduction cycle. In his Twitter, he said that the main US problem is not China but the Fed.  USD grows against EUR and moves horizontally against JPY and GBP.

 

Today, oil prices are being corrected upwards. Quotations are supported by positive data on the sentiment index in the Chinese industry, indicating a revival of China’s manufacturing sector, which may stimulate an increase in energy demand. In the evening, the publication of the Baker Hughes report on active oil platforms in the United States of America is expected. Previously, the number reduced from 713 to 696 units. Continuation of this trend may support quotes.

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Eurozone

EUR is weakening against GBP and USD but moves horizontally against JPY.

Due to a lack of significant European economic releases, EUR is trading under the influence of external factors. EUR is supported by positive Chinese data. The October index of business activity in the manufacturing sector of the PRC from Caixin, instead of the expected decline, continued to grow for the fifth month in a row and reached 51.7 points, the best since January 2017. The prospects for the restoration of the Chinese industry are encouraging European investors. On the other hand, the significant strengthening of EUR is hindered by news on probable problems with the signing of trade agreements between the United States and China. The limited agreement was to be signed in mid-November in Chile at the APEC summit but it was canceled and a new date has not yet been agreed. Also, Bloomberg reported that Chinese officials questioned the success of a common trade deal.

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United Kingdom

GBP strengthens against EUR and JPY but moves horizontally against USD.

British investors are focused on the upcoming parliamentary elections, as well as the publication of statistics on business activity in the UK manufacturing sector. British parties continue the campaign, during which conservatives may have unexpected problems. They can enter the battle not only with the Labor Party but also with the Brexit party Nigel Farage, who also advocates the speedy exit of the United Kingdom from the EU and is gaining more and more popularity in the country. Farage suggested Boris Johnson enter into an official political alliance but the conservatives hesitate to answer, which may lead them to compete with forces of the same political orientation and reduce their chances of winning a majority in Parliament. The October data on the index of business activity in the manufacturing sector in the UK, released today, were positive. The indicator rose for the second month in a row and reached the level of 49.6 points, closely approaching the benchmark of 50 points, after which the sector begins to grow.

Japan

JPY is weakening against GBP and moves horizontally against EUR and USD.

Japanese investors are focused on the publication of data on the unemployment rate in Japan, which turned out to be negative. For September, the indicator grew stronger than the market expected and amounted to 2.4%, which is a four-month high. The total number of unemployed increased by 130K people and amounted to 1.67 million. Nevertheless, unemployment in Japan continues to remain around the historical lows.

Australia

AUD strengthens against EUR and JPY but moves horizontally against USD and GBP.

AUD is influenced by opposing factors related to the Chinese economy. It, like other commodity currencies, is supported by positive data on sentiment in the Chinese industry. The index rose for the fifth month in a row and reached 51.7 points. On the other hand, investors are concerned about the uncertainty over the signing of a partial trade deal between the United States and China.

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