Markets ignore upbeat NFP as pressure increases on FED

The highly anticipated US NFP report came in slightly above expectations at 531K vs 455K and showed Average Hourly Earnings m/m change of 0,4% confirming the ADP report which indicated an increase of over 500K earlier this week. Stock indices in Europe and US futures were trading higher ahead of the US jobs data release and have managed to maintain their gains as they hover around all time highs. Furthermore, the US dollar continues to be one of the best performing currencies with GPBUSD pair reaching the lowest level in over a month after the BoE decided to leave rates unchanged in its most recent meeting. The report comes after the FED's announcement of QE tapering which also did not have a significant impact on stocks, as it was mostly priced in. On the other hand, today's NFP could highlight the importance of macro data for the central bank and may lead to discussions related to rate hikes in the near future, as Powell stressed the significance of wage data on potential future changes in policy. In either case, the FED will be under increasing pressure to reassure markets against the risks of what it has maintained is "transitory" inflation as other central banks begin to take steps to adjust fiscal and monetary policy.

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Walid Koudmani

Market Analyst working in UK-Italian-Arabic markets covering a broad range of assets including stocks, commodities, FX and crypto. English, Italian and Arabic Speaker with a B.A in Business Management. Quoted in many prestigious publications including the Guardian, Barrons and Lefigaro and winner of bloomberg top forecast rank Q-2/Q-3 2020.