Goldilocks Jobs Report Sends Stocks Higher as Dollar Tumbles

Global financial markets are having a volatile and hectic session, with wild swings in both directions, as markets have been on trade wars and the US official employment numbers. Asia started the day on a negative note yet again, but the Nikkei and the strongly oversold Shanghai Composite both recovered by the end of the session, despite the kick-in of the Chinese retaliatory tariffs.

Nikkei 225, 4-Hour Chart Analysis

The European session saw another selloff but global stocks jumped higher in US trading, following the most awaited economic numbers. While the US government jobs report was not spectacular, with the Unemployment Rate ticking higher, and wage growth disappointing, the beat in non-farm payrolls and the upward revision of the previous release lifted markets.

EUR/USD, 4-Hour Chart Analysis

Trading volumes remained low, in line with the holiday week in the US, and that also added to volatility across asset classes. As inflation fears eased and rate hike odds declined thanks to the lower than expected wage growth, the “Goldilocks” trade (low inflation-modest growth) is on again, with the Dollar dropping to a three week low against the Euro.

Nasdaq, 4-Hour Chart Analysis

The US tech sector, together with the small-cap segment is back to leading the market higher, with the Russell 2000 surging back towards its all-time high and the Nasdaq also gaining significant ground after its recent pullback.

That said, the international divergences are still apparent, and the next week will be crucial in deciding the fate of the short-term trend, as European assets aren’t looking strong here, not to mention the still struggling emerging markets.

Another Wild Day in Oil as Gold Flatlines

Oil was once again the most heavily traded asset globally, with the front WTI contract covering an almost 3% range during the day, first falling as low as $72 per barrel, then rallying back to $74 in late trading. The key commodity is still thrown around by opposing forces, while the rest of the segment is following the Dollar and Asian markets closely.

Gold Futures, 4-Hour Chart Analysis

Copper hit another 12-month low in early trading during the Asian session, while gold got stick below the $1260 level while gold got stuck near the $1260 level after the sharp oversold rally. The precious metal is still oversold from a longer-term perspective, and we expect a durable rally in the coming weeks.

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Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.