Let's take a look at last week's market action and what to expect this coming week April
7th 2014.
Euro should continue to decline on inaction of the ECB
Gold expected to give back short term gains And US data kicks off with retail sales on
Monday Let's take a quick look at what happened in
the global markets last week and what we need to be aware of for the upcoming week.
Markets ended the week deep in the red.
At the end of the day the Dow was down 160 points The Nasdaq closed down 2.6%.
And the S&P 500 ended the day down 1.25%.
Employers added 192thousand jobs last month, while unemployment remained at 6.7%.
Analysts expected 200thousand jobs to be created and unemployment to drop to 6.6%.
January's non-farm payrolls report was revised up to 144thousand from 129thousand.
Attorney General Eric Holder said the Justice Department is investigating whether high-frequency
trading violates insider trading laws.
This comes as both the FBI and the Securities and Exchange Commission confirmed this week
that each has ongoing investigations into high-frequency trading.
In other news, ISM reported that the manufacturing sector in the U.S. accelerated slightly in
March.
The ISM manufacturing index rose from 53.2 to 53.7 in March.
Meanwhile, ISM reported that its U.S. non-manufacturing gauge for March rebounded from 51.6 to 53.1.
Levels above 50 represent expansion, while levels below 50 represent contraction.
Elsewhere, the ECB kept its benchmark overnight interest rate steady at a record-low 0.25
percent, as was widely expected.
Speaking to journalists after the policy decision, ECB President Mario Draghi said the central
bank does not exclude further monetary easing.
He also said that ECB officials were unanimous on using unconventional policy tools if necessary
- including quantitative easing.
The ECB has kept monetary policy extremely accommodative amid low levels of inflation
and high levels of unemployment.
The Chinese government released its official manufacturing PMI for March.
The index edged up from 50.2 in February to 50.3, close to expectations.
At the same time, HSBC's manufacturing gauge for China - which measures smaller firms in
the country - edged down from 48.1 to 48, also close to expectations.
Levels above 50 represent expansion, while levels below 50 represent contraction.
European markets finished higher on Friday, likely fueled by the European Central Bank's
pledge yesterday to do some sort of quantitative easing, if necessary.
Asian markets ended the week mixed.
China's benchmark Shanghai Composite rose 0.7%, while stocks in Singapore dropped 0.3%.
The Nikkei was little changed.
In the foreign exchange market the dollar rose to a fresh one-month high against the
euro Friday as currency traders took the latest U.S. employment reading as confirmation of
an improving economy.
The euro slid 0.1% against the dollar, to $1.37-05.
The common currency had reached $1.36-72 in intraday trade, its lowest level since Feb.
27th.
U.S. job creation in March was largely in line with estimates, suggesting that the Federal
Reserve is likely to stay the course in trimming bond purchases every month, moves that have
been supporting the dollar.
The euro has been weakening against the dollar amid expectations that the European Central
Bank would take measures to stoke growth in the euro zone.
The ECB on Thursday opened the door to easing measures such as a cut in interest rates or
a bond-buying program to stimulate the economy.
Moving to the commodities market gold clawed back this week as bargain hunters entered
the market following recent losses, the recent 112 dollar decline in prices was a short-term
reaction to the Fed's hawkish outlook for interest rates laid out in its last meeting
on March 19th.
However, gold is not at risk of falling into a major downtrend or hitting new lows below
the cycle low at $11-80.
Oil prices slumped this week amid hopes that some of Libya's shuttered production could
come back online.
Earlier in the week, Brent fell to a five-month low below $104, but prices rebounded after
rebel sources claimed there was no compromise with the government and that the oil ports
would not be reopening.
This is Amy Anderson from OptionRally signing off.
Watch for some exciting changes to Optionrally TV coming later this month and of course im
waiting for your like below if you enjoyed todays Market Watch.
Have a great week.