Stocks back under pressure after mixed NFP; CAD falls on weak jobs breakdown

Summary:

• Stocks slide as rising yield fears grow

• US NFP misses but large prior revision causes mixed reaction

• Strong Canadian jobs data all part-time roles; CAD pulls back

• What do charts tell us about cryptocurrencies?

There’s been further weakness in stocks today with declines seen across the board. The markets remain skittish around the recent rise in yields and should the major indices (US500, US100, DE30, UK100) end the week around present levels then it would make for some pretty ugly looking weekly candles.

The keenly anticipated US jobs report has caused an interesting market reaction with a large miss in the headline figure but an even bigger positive revision to the previous release sending mixed signals. Given a consensus forecast of 185k and strong ADP and ISM reading in the week the bar was high coming into today’s number, and on the face of it a print of 134k represents a bad miss. In fact the figure for September is the lowest since the March data and only one other NFP in 2018 has provided a lower reading. However, a significant revision higher to the previous reading changing the context substantially with the August number now reading 270k from 201k when it was first released last month. Looking back this has become something of a recurring theme of late with 8 of the last 10 NFPs seeing the prior number revised higher.

The Canadian employment figures are often overlooked due to their release coinciding with the US equivalent, but perhaps because of this it can provide some good trading opportunities. Here we got almost the opposite release to that seen in the US with the headline reading showing a bumper beat, but when you look more closely the data was not so positive. For the month of September the employment changer rose to 63.3k from -51.6k in August, more than the 25k estimated. However, as is often the case with Canadian jobs figures, the composition of the roles is key and here it doesn’t look so positive. The entire rise in employment can be attributed to part time roles (+80.2K vs +20k exp) with full time positions actually declining (-16.9k vs +15k exp) for the month.  

Crypto markets have been uncharacteristically quiet of late and today is no different, with none of the 5 moving by more than 1.5% at the time of writing. We earlier focused on Ethereum, Litecoin and Bitcoin from a technical analysis perspective and this news story can be viewed here.