Friday night US Markets
There was an element of the US stock market temporarily running out of oxygen at the heady heights that it had reached and looking for an excuse to take profits/sell. That excuse was provided in spades by POTUS who pronounced that he would implement much higher tariffs against China. That was the flashpoint with the S&P selling off nearly 2%, Oil falling 4%, and USD giving back some of its gains made in the course of last week. Gold, needless to say, piled on $15 and shot up to $3992. US Treasury Bonds rallied with yields falling 8-10 bps in contrast to the sea of red in the equity markets. As for crypto being a good hedge: it sold off across the spectrum. Just for good measure Copper sold off 5% on the London Metal Exchange as traders unsurprisingly interpreted POTUS tariffs as being universally negative for the global economy.
EUR/USD 1.1620.
UK Employment
An early indicator of an economy that if not stalling is showing signs of stuttering is when pay levels stagnate and employers turn the recruitment taps off. According to the UK’s top recruitment agencies, both are happening which is less than positive for shares in those companies. Talking to one City recruitment company this week, they not only confirmed both of those trends but went further saying that employers have responded to the changes in UK employment law that disadvantage the employer by simply saying that they are not prepared to recruit speculatively as they did previously. What that means is that getting on to the employment ladder as a new graduate or a school leaver has just become a whole lot harder.
GBP/USD 1.3360.