Market update: Huge US job miss makes traders wondering, GBP falls on Brexit disarray, Pakistan tries to pacify India

11 Mar

by Mihály Tatár

 

Good Morning!

 

  • The last thing investors wanted to see was the US economy having problems, too, with the US employment data delivering a huge miss (20.000 jobs created instead of 180.000 in February. As always, one-off distortion factors were quickly found, and indeed, at a dropping-to-3.8% unemployment rate it’s hard to create jobs at the same pace as at 4% or 5%, still, many were wondering if the US finally caught the ’global sickness’). That led stocks lower again, with only Asian shares rallying this morning (SPX -0.21%, Nasdaq -0.18%, DAX -0.52%, Nikkei +0.37%, Shanghai +1.37%), helped by a rare intervention from the Chinese customs head that exports seem to be surging in March. (Last week’s data, discussed here, that exports dropped by a shocking 21% in February, generated near-panic.) Oil prices stay in their range (WTI 56.40, Brent 66 USD), and currencies traders seemed to be unsure how to continue (EURUSD 1.1240 – everyone waiting for Trump’s angry tweet after the pair crushed the key 1.1250 level, EURHUF 315.50 – not really surprising anyone, Hungarian inflation rose to 3.1% in February), with only the Pound dropping without hesitation (GBPUSD 1.2980) as the May-team looked more in a disarray than ever and according to Telegraph, the EU prepared ’a multibillion GBP punishment’ for a Brexit delay. In other news, it was leaked that Commerzbank and Deutsche Bank resumed merger discussions (German Finance Minister Olaf Scholz already hinted that a ’national champion’ needs to be created to ’serve the export economy’, anyone remembers yet how fiercly the EU used to fight against creating mega companies? Of course, at 7 euros per share from 2007’s 80 euros, Deutsche Bank doesn’t look so fearsome anymore); and the head of CDU, Annagret Kramp-Karrenbauer flatly rejected ‘European centralism’ (Macron, know your place) from the European minimum wage idea to the joint debt issuance, almost everything Macron recommended a week ago. (Of course, the key issue avoided at all costs by both Macron and AKK is immigration: Voters better don’t upset themselves before the EU elections.)

 

  • While Pakistani Prime Minister Khan assured everyone who wasn’t yet assured that ’Pakistan is ready for war’ and warned against a ’misadventure’ by India, in the background Islamabad banned several militant organizations, arrested hundreds of suspects and confiscated properties and training facilities. Naturally, everyone wonders whether this will be enough for India or seen as the usual show – probably only enough until the next cross-border terrorist attack. In the meantime, rising star of the US Left Alexandria Ocasio-Cortez slammed capitalism as ’irredeemable’ and described Roosevelt’s New Deal as ’a racist policy against brown and black minorities’. (Uh, you haven’t learned this at school, have you). Interestingly, while this confirmed Trump’s statement that the 2020 election will be about either him or progressive socialism, the pro-Democrat newspapers see differently: According to them, 2020 will be – apart from of course stopping Trump – ’The Climate Election’, and only the most radical candidate has a chance to win the hearts of young voters.

 

Have a nice week,

Mihály

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