European closing thoughts 07/09/12

Let's go straight to the point: Labor Department figures showed the economy added 96,000 workers last month following a revised 141,000 rise in July that was smaller than initially estimated. The median estimate of 92 economists surveyed by Bloomberg called for a gain of 130,000. Unemployment unexpectedly fell to 8.1 percent, and hourly earnings were unchanged.

The market took weak jobs number as expected in our Morning Meeting or as a positive because it means that investors are going to get action from Mr Bernanke.

In US the DJIA Index gained 0.05% to 13,299.20, the S&P500 Index traded 0.29% higher to 1,436.21 while the Nasdaq inched up 0.07% to 3,137.96.

A quick remark, the S&P500 yesterday climbed to its highest level since 2008 as the ECB announced specifics of its bond-buying plan and data boosted optimism in the American economy. The index has risen 14 percent this year as European leaders worked to tame the region's debt crisis and the Fed vowed to safeguard the economic recovery. Yesterday's advance left the S&P 500 9.3 percent from its all-time high of 1,565.15, reached Oct. 9, 2007. Bloomberg reports.

The US dollar fell 0.74% to 80.441 against a basket of major currencies. The euro touched around a four-month high against the dollar of $1.2777 before more recently trading at $1.2756. The benchmark 10-year U.S. Treasury note was up 19/32 in price, with the yield at 1.6113 percent.

In Europe, Ten-year Spanish bond yield slid to 5.789 percent, their lowest since early May but the Spanish gauge was unable to make the green trading along the flat line at 7,860.70.

Stoxx50 rose 0.61% to 2,540.24, the German Dax traded 0.76% higher to 7,222.14 while the Italian FtseMib led gainers raising 2.12% to 16,115.34, as the ECB's bond buying plan continued to help the market.

But caution is needed due to uncertainty related to events such as the U.S. Federal Reserve's Sept. 12-13 meeting and a ruling by the German Constitutional Court on Sept. 12 on the euro zone's bailout fund.

Gold futures rallied today being a proxy trade for additional US economic stimulus coming sooner rather than later, Gold for December delivery  rose 1.92% to $1,738.16 an ounce . The SPDR Gold Trust, the largest gold-backed ETF, rose 2.04% . The ETF's holdings has held steady in recent days, with 1.293 metric tons in the trust, from 1.289 metric tons in the prior week and 1.254 in early August.

Crude oil futures traded 0.07% higher to 95.60$ a barrel taking a rest from the latest rally.

It has been a cheerful week for financial markets world wide, the question is will it last??

It has been a long week for all of us, therefore let me wish you a very pleasant weekend.

Originally posted at www.77sigmatrading.com