The week that is coming to an end was marked by declines on many equity markets around the World. Severe sell-off was especially visible in Europe and Japan. While in the US the pullback was not as intense the S&P 500 moved lower to trade in the vicinity of breakout level around 2880 pts at press time.
The major market event of the day (and also of the week) - the NFP report publication - can be named as upbeat. The wage growth finally accelerate what may exert some inflationary pressure and thus justify more hikes from Fed. The Canadian peer report released simultaneously saw significant drop in the total employment. However, it was mostly fuelled by the part time jobs. The full-time employment change actually came in better-than-expected. Nevertheless, the data mix pushed USDCAD currency pair higher.
Elsewhere, oil keeps moving lower despite upbeat inventory readings this week. This may reflect investors’ concerns over escalation of the Trade War between China and the US. Keep in mind that the deadline for discussion over possible tariffs on $200 billion worth of China goods is already behind us therefore Trump may impose duties at any moment.
Turkish lira continues its recovery ahead of the CBRT meeting next week. Market consensus suggests that the Turkish central bank may raise interest rates by 325 bp from 17.75% to 21% (one week repo rate). Apart from that, ECB and BoE will announce their decision next week. All three central banks will meet on Thursday. SEK is outperforming other G10 currencies while AUD is the weakest in the basket.
