ASX set to unwind Friday’s gains, Aussie dollar spikes


Stocks in Europe and North America finished the trading week on a negative footing. The Stoxx Europe 600 Index shed just over 0.1 per cent while the benchmark S&P 500 in the US dropped just shy of 0.3 per cent. In Wall Street trade, the losses were sustained primarily in the financial sector and ahead of a week highlighted by earnings reports from some of the United States’ largest financial institutions.

US nonfarm payrolls data highlighted Friday’s trade. The data disappointed slightly, showing US jobs grew by 145,000 last month versus a consensus estimate of 162,000. The wage growth component of the data release was perhaps a silver lining for market participants. It showed hourly earnings grew at a modest 0.1 per cent last month against the 0.3 per cent forecast, reassuring traders that inflation risk remains low in the US economy.

The soft US jobs data weighed on risk appetite on Friday. It was generally responsible for the dip in US equities and saw a marginal play into safe-haven government bonds. The US dollar also suffered, dipping roughly 0.25 per cent post-release as traders increased expectations slightly for US Fed interest rate cuts at some point this year. That dynamic supported a brief jump in the AUD above 69 cents. Gold prices also gained 0.65 per cent.


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