Stocks attempt to recover while GBP gains on wage data

Summary:

• Stocks look to recover recent losses

• Pound gains on strong employment data

• Gold near 3-month highs as Hungary increases reserves

• Top 3 charts this week; Silver, GBPJPY and JAP225

• Crypto markets edge higher as Fidelity unveils plans

It’s been a pretty good day for stock markets on the whole with green closes seen across Europe and the US is on track for a good day of gains. Several of the major European indices have risen by more than 1% on the day while the US100 is leading the charge across the pond and more than 2% higher. There’s not been much by the way of positive news to support this rally, although some upbeat remarks on Italy and its role in the EU won’t have hurt, and the market are looking to recoup some of their losses seen last week.

There’s also been gains seen in sterling today with the market jumping back above the $1.32 handle following the release this morning of the latest employment data from the UK. The wage figures for August in particular were supportive of the pound with average earnings, when bonuses are stripped out, unexpectedly rising to 3.1% in annualised terms - which is the biggest jump in almost a decade since while the unemployment rate of 4.0% remains close to the lowest in 43 years. Having said that, while this data is good news for the pound the main driver for the currency remains Brexit negotiations and with the EU summit starting tomorrow, traders will be watching extremely closely for any further developments on this front

After respecting an uncharacteristically narrow range for several months there’s been a strong move higher in the price of Gold of late, with bullion surging higher. The market received a boost last week when US inflation came in a little lower than expected and price continues to trade not far from a 3-month high around the $1230 mark.  While the CPI miss may have provided the spark for this breakout, there are several other factors at play. Reports today show that Hungary has been a big buyer of Gold of late, increasing its reserves tenfold to 31.5 tons. Central bank governor Gyorgy Matolcsy said the decision was of “economic and national strategic importance,” recalling the country’s medieval history when he said the Hungarian kingdom had been flush with gold.    

Our top 3 charts this week focus on Silver, GBPJPY and JAP225 and can be viewed here.

There’s been small gains seen across the crypto space today with all 5 market higher at the time of writing. Ripple is the best performer and up by almost 5% to trade back at $0.45. Fidelity Investments, one of the World’s biggest financial service providers, is taking a step into the cryptocurrency sphere. The company announced that it is developing trading platform for cryptocurrencies. The platform will be targeted at institutional investors. Apart from trading execution services customers of Fidelity will receive cryptocurrency custody as well as dedicated client service. The custody will be conducted via cold storage that will be additionally boosted by “multi-level physical and cyber controls”.