Markets in Europe and in the US are rallying.
- US Non Farm Payrolls rose 163,000 last month, the Labor Department said, beating economists' expectations for a 100,000 gain. The unemployment rate, however,inched up to 8.3% form 8.2% in June.
Therefore we have the NFP number which offers hopes for improvement in the US economy,on the other side we have the unemployment rate number which supports expectations of further monetary stimulus by the Fed.
But the boost came from Europe:
- Merkel coalition members signaled they won't stand in the way of European Central Bank chief Mario Draghi's plan to buy government bonds.The envisaged move to purchase troubled euro states' government bonds is “a wise middle way” to solve the region's debt crisis, Elmar Brok, a European Parliament lawmaker and executive-committee member of Merkel's Christian Democratic Union party, told Deutschlandfunk radio today.Bloomberg reports.
- Spain's Prime Minister Rajoy said today that he would consider asking the bailout funds to buy Spanish debt if it was “in the best interest of Spaniards.” He said he needs to see more details on what the ECB is planning in terms of bond buying and non-conventional measures before taking any decision.
All these elements togethers sent the S&P500 Index toward the highest level since May to 1,390.57, the DJIA above 13,100 mark.
In Europe: Stoxx50 closed 4.54% higher to 2,366.22, the German Dax 3,91% higher, Italian Ftsemib and Spanish Ibex both closed higher than 5% respectively 6.34% to 14,071.48 and 6.00% to 6,727.40.
Spanish government bonds fell 32 basis points to 6.87, pressure also eased on Italian bonds, with the 10 year government paper falling 25 basis points to 6.12.
The common currency gained 1.52% versus the Dollar to 1.2365%, Gold was 0.90% higher to 1,605$ and Oil(Wti) skyrocketed 4.46% to 91.02$.
It looks like yesterday doubts were all sorted out, the threat campaign put in place by Mr Draghi yesterday was able to offer some relief together with expectations in future move by the Federal Reserve.
My question is: Is a market addicted to easy money, healthy?
This long week is finally over. Enjoy your weekend.
Originally posted at www.77sigmatrading.com
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