CURRENCY MARKET WRAP
As of Mon Sep 9th, Singapore Time zone UTC+8
U.S. Dollar Index, -0.02%, 98.39
USDJPY, +0.00%, $106.92
EURUSD, -0.05%, $1.1029
GBPUSD, -0.40%, $1.2282
USDCAD, -0.43%, $1.3172
AUDUSD, +0.47%, $0.6847
NZDUSD, +0.82%, $0.6427
From a headline perspective, the U.S. employment report appeared to disappoint as jobs growth came in below expectations. Nonfarm payrolls increased by 130,000 (consensus 163,000). The positive spin, however, was that the labor participation rate, employment-population ratio, and total number of employed workers all increased from July. Average Hourly Earnings were also up at 0.4% m/m (consensus 0.3% m/m), while the unemployment rate held firm at 3.7% as expected.
The labor force participation rate increased to 63.2% from 63.0% in July (and 62.7% yr ago), the employment-population ratio rose to 60.9% from 60.7% (and 60.3% yr ago), and the total number of employed workers increased by 590,000 versus July. In sum, more people are working and earning money, which is a good recipe for increased consumer spending.
U.S. Treasuries finished slightly higher after a sharp sell-off yesterday. The 2-yr yield and the 10-yr yield declined two basis points each to 1.52% and 1.55% respectively. The U.S. Dollar Index finished relatively flat at 98.39. WTI crude increased 0.3%, or $0.14, to $56.45/bbl.
In contrast, Canada’s labor market is on fire. More than 81.1K jobs were created in August (consensus 18.9K) with a nice mix between full and part time work. This was the second strongest month of job growth this year and among the 3rd best month for the labor market in the past 5 years. Reports like this validate the central bank’s neutral outlook. At the last monetary policy meeting, the Bank of Canada said they feel the “current degree of monetary policy stimulus” is appropriate. While they recognize that the escalating trade conflict is affecting Canada’s economy, they also feel that the economy is close to potential and inflation is on target.
STOCK MARKET WRAP
S&P500, +0.09%, 2,978.71
Nasdaq, -0.17%, 8,103.07
Nikkei Futures, +0.54%, 21,199.57
The stock market finished mixed on Friday, as it cooled off from a two-day rally amid a lackluster response to the August employment report. The S&P 500 (+0.09%) and Dow Jones Industrial Average (+0.3%) closed just above their unchanged marks, while the Nasdaq Composite (-0.17%) and Russell 2000 (-0.4%) closed slightly lower.
Today’s action didn’t reflect much enthusiasm, though, but that wasn’t out of the ordinary after a sharp two-day rally in stocks. Friday’s leaders were an eclectic group: energy (+0.5%), materials (+0.5%), and consumer staples (+0.5%). The utilities (-0.3%), communication services (-0.2%), and information technology (-0.2%) sectors finished in negative territory.
Facebook (FB 187.49, -3.41, -1.8%) dragged on the communication services sector after New York announced a formal antitrust investigation into the company. Lululemon athletica (LULU 203.14, +14.73, +7.8%)impressed investors with positive results and upbeat guidance, which may have helped buying interest trickle over into the S&P 500 consumer discretionary sector (+0.2%).
DocuSign (DOCU 56.27, +10.02, +21.7%) was another standout, rising over 20% after the software company beat revenue estimates and issued upside revenue guidance.