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US payrolls weaker than expected

Published September 9, 2019

Author : Brett Gordon

Sentiment started to turn around by the end of last week but a half hearted close to Wall Street on Friday has the Australian sharemarket set up for a flat start to a busy week.There was good reason for Wall Street’s indifferent day’s trade on Friday. US Non-Farm Payrolls data was released, and revealed what was probably, on balance, a soft set of numbers. They weren’t very poor, by any means. US Yields dropped with the Dollar, while stock markets wobbled, as investors opted to briefly step-away from the recent risk-on rally.

Chair Powell speech on Friday said the Fed will act to ensure the US economic expansion continues. Given the weakening fundamental outlook for the US and global economy, markets have interpreted that as meaning another rate cut is coming this month, with market pricing giving it a 95 per cent chance.

This week we could see allot of market volatility through several geopolitical concerns. One might even go as far as saying that given the several tiers of political-problems affecting the global economy presently, geopolitics is the number one risk for financial markets right now.

The US-China trade war is undoubtedly the most significant. But add in the protests in Hong Kong, ongoing Brexit-drama, and tensions in the Middle-East ahead of a major OPEC summit this week, the longevity of the current market recovery will likely hinge on all of these issues remaining relatively settled and stable.