The unemployment data released on Friday revealed no great surprises as the nonfarm payrolls were right in line with consensus. The markets also offered up no real divergences from the norm as the S&Ps rallied but by day’s end the U.S. equities closed basically unchanged (although the NASDAQ continued to outperform all other indices.) The EURO currency dropped further and wound up losing 1.7% for the week even while the S&Ps gained 1.7%.
Posts Tagged ‘French’
The market is rife with rumors about the previous agreement to bail out the bank and insurance firm DEXIA is coming apart as the Belgians are balking at the cost. Something that needs to be considered is that the French are probably putting pressure on the deal to force the Germans to agree an EBC-sponsored bailout so as to get a major infusion of capital. Dexia is already a problem for Europe so by getting the Belgians to pull the plug on the deal the French can force the Germans to immediately step up and agree to a large role for the ECB.
Round and round the EU goes as it searches for a way to resolve its self-made crisis. As predicted, the Germans and French leaked news to the press–via the Guardian–that a deal had been struck, which would provide the EFSF and the ECB with an equivalent of 2 TRILLION Euros for aiding and abetting the bailout and support of the European financial system. The early afternoon news story gave impetus for the equities to RALLY as well as a SELLOFF in the DOLLAR. The precious metals staged a late recovery after a very severe correction in the morning–GOLD was down almost $50 at its lows.
Just when it looked like the risk-on paradigm was gaining some traction, Chancellor Merkel, through her spokesman, Steffen Seibert, said, “…dreams that are taking hold again now that with this package everything will be solved and everything will be over on Monday won’t be able to be fulfilled.” The global equity markets were experiencing a continued rally from Friday when the Merkel statement was released and the market immediately went into sell mode and risk off. The U.S. equity markets tried to maintain Friday’s sizable rally as the news of CITI and WELLS FARGO earnings provided a momentary boost. Overnight the U.S., markets were supported by the news that KINDER MORGAN was buying the pipeline and energy producer, EL PASO.
The unemployment report in the U.S. was much weaker than the White House pre-supposed. Yes, the Census created 400,000-plus jobs, but somebody forgot to tell the president that while 400,000 jobs is a nice headline number, the market was looking for more growth from the private sector. Prior to the jobs number, the Canadian data was released and that was stronger than anticipated but the unwind of risk couldn’t help the LOONIE.