Q: How was the Dow on Friday?
A: US shares had a rocky session but ended slightly to the upside Friday
afternoon as a robust jobs report was mostly overshadowed by lingering fears about the credit markets. After falling more than 120 points, the Dow Jones Industrial Average rebounded to finish higher by 27.73 points, or 0.2%, to 13,595.10, and the S&P 500 gained 1.21 points, or 0.1%, to 1,509.65. The Nasdaq Composite was up 15.55 points, or 0.6%, at 2,810.38. Earlier, a sizable rebound appeared to be in order after the Labor Department’s non-farm payrolls report showed that the economy added 166,000 jobs last month, more than doubling expectations. The report also said that the unemployment rate remained unchanged at 4.7%. Average hourly earnings rose 0.2%, slightly below consensus. The September and August data were revised to reflect 10,000 fewer jobs created.
Q: What about crude?
A: Crude futures closed at an all-time high Friday, energized by week-long trading momentum, a strong US jobs report and the continuing takedown of the greenback. December light sweet crude futures closed up US$2.44 to US$95.93 a barrel at the New York Mercantile Exchange. Reformulated gasoline jumped 10 cents to US$2.44 a gallon, and heating oil was 6 cents higher at US$2.57 a gallon. While crude oils momentum has trended upward all week, the market has seen volatile swings in both directions, the likes of which some analysts say have never been seen before. On Wednesday alone, crude oil swung within a US$5 range, topping out at US$96.24 in overnight trading Thursday. Helping boost crude prices was a Labor Department report that the economy added 166,000 new jobs in October. Since oil is considered a major feedstock for economic activity, crude prices tend to rise on signs of economic growth.
Also relevant was the US dollar, which fell to a new all-time low of US$1.4528 to the EUR. Because oil is denominated in USD, the price-per-barrel of crude oil rises when the value of the dollar falls.
Q: What about the forex markets?
A: The USD continued to drop on Friday finishing the week at all time lows
against the EUR and 26-year lows against the GBP. Strong US payroll data was not enough to reverse the recent trend with the market continuing to focus on credit fears in the aftermath of last weeks reduction in U.S interest rates.
Payrolls posted their largest gains in five months, increasing by 166,000
during the month of October which also coincided with a 4.7% nemployment rate over the same period. The EUR peaked near 1.4530 against the USD in late New York trade whilst the JPY finished relatively unchanged at 114.80. In other news the Canadian unemployment rate dropped to 33-year lows and coupled with the weakness in the USD, USD/CAD dropped to lows of 0.9330.