Daily summary: Strong NFP data in the US, yet markets decline

5:11 PM February 7, 2020
  • More than 31 thousand of coronavirus cases worldwide

  • Strong NFP data in the US, yet markets decline

  • AUD/USD hits 10-year low

 

Another day brings us crucial coronavirus updates. As of Friday morning there have been more than 31 thousand confirmed cases, including 636 deaths. The number of cases jumped after The Japanese Health Ministry confirmed 41 new cases of the virus on a quarantined cruise ship - there have been 61 cases aboard so far. The pace of the outbreak unfortunately does not seem to weaken.

 

In the US payroll data robustly beat expectations - the recent reading indicates 225,000 new jobs created in January (est. 165,000). The unemployment rate came to 3.6% (prior 3.5%). In face of astonishing ADP report, the current figures do seem rather poor, still, they show a promising outlook for the US economy. 

 

On the other hand, investors may be truly disappointed with data from Germany. Germany’s industrial production slumped 3.5% from the previous month in December and 6.8% YoY, which is the biggest fall in almost 11 years. 

 

Solid data from the US helped the dollar maintain gains against the euro, the US currency is now trading below 1.1000 level. The outlook for Germany’s industry only reassured traders. Stocks, on the other hand, are falling as Wall Street opened in the red on Friday. Having reached record highs the day before, US indices (and European as well) seem to have run out of steam. 

 

As far as record highs and lows are concerned, one could witness a significant drop in AUD/USD, which managed to fall below 0.6700 support level. In fact, the Australia’s dollar fell to its lowest level versus the US dollar since 2009, now trading at 0.6678. The move is the market’s response to the rising number of coronavirus infections and strong US jobs numbers. 

 

In the next week, apart from key updates regarding coronavirus, investors will be offered GDP reports from the UK and Germany, as well as CPI and retail sales from the US. Moreover, one should pay attention to the earnings calendar as the earnings season is still not over. 

AUD/USD fell below below 0.6700 support level. The Australia’s dollar fell to its lowest level versus the US dollar since 2009. Source: xStation5

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