United States Job Growth Slows in September

News Event

From Trading Economics: Total nonfarm payroll employment in the United States increased by 156,000 in September of 2016, less than an upwardly revised 167,000 in August and below market expectations of 175,000. The change for July was revised down from 275,000 to 252,000. Employment gains occurred in professional and business services and in health care. It is the lowest payroll figure in 4 months. Employment gains occurred in professional and business services and in health care. So far this year, job growth has averaged 178,000 per month, compared with an average of 229,000 per month in 2015.

Market Closing Wrap

In European Equity Markets, stocks fell on Friday, with vouchers company Edenred and airline easyJet among the worst performers, although a new fall in sterling propped up Britain's FTSE 100. The pan-European STOXX 600 index was down by 0.5 percent and Germany's DAX and France's CAC both retreated by a similar amount. The STOXX 600 has fallen by around 7 percent since the start of 2016. Edenred fell 4.7 percent after UBS cut its rating on the stock to "neutral" from "buy". EasyJet fell 3.3 percent after broker downgrades following its profit warning on Thursday. However, the FTSE 100 managed to gain 0.5 percent, since the fall in sterling should benefit exporters and help the index's international companies.

In Currency Markets, sterling tripped lower on Friday on what traders called a "flash crash" that knocked the currency to a 31-year low, while the dollar fell on news of unexpectedly weak U.S. job growth in September. On Friday, the pound plunged about 10 percent from levels around $1.2600 to $1.1378 in a matter of minutes in thin early Asian trading. Sterling retraced to $1.2450 in U.S. trading,  which was still down 1.3 percent on the day. The greenback fell hard against the yen, losing as much as 1 percent after the jobs data. It was last down 0.7 percent at 103.17 yen. The euro rose 0.2 percent to $1.1174 but fell 0.7 percent to 115.22 yen. The dollar index was last down 0.1 percent at 96.682.

In Commodities Markets oil fell nearly 2 percent on Friday as players took profit on a rally with little pause over the past week that propelled prices nearly 15 percent to four-month highs on hopes of OPEC crude output cuts.  Brent crude was down nearly 2 percent, at $51.51 a barrel. U.S. WTI crude fell 1.8 percent, to $49.74. OPEC hopes to bring its output down to 32.5 million-33 million barrels per day, cutting about 700,000 bpd from a global glut estimated by analysts at 1.0 million to 1.5 million bpd.  Spot gold was at $1,263.18 an ounce, up 0.8 percent. Silver was up 1.6 percent at $17.56 an ounce. Platinum was up 0.3 percent at $965.85, while palladium was 1.3 percent higher at $676.07.

In US Equity Markets stocks fell on Friday after weaker-than-expected September jobs report had little effect on the prospects of an interest rate hike by the year end. The S&P 500 was down 0.29 percent, at 2,154.52 and the Nasdaq Composite was down 0.24 percent, at 5,294.21. Seven of the 11 major S&P 500 indexes were lower, with materials falling 1.38 percent and industrials 1.11 percent. Honeywell's  7.3 percent fall weighed on industrials after the aero parts supplier lowered the upper end of its 2016 sales and profit forecast range. Chemical company PPG  was down 8.3 percent after forecasting a third-quarter loss. Tyson Foods fell nearly 9 percent after Pivotal Capital downgraded its stock to "sell" from "buy".

In Bond Markets U.S. Treasuries fell slightly on Friday in choppy trading after data showed that U.S. employment growth unexpectedly slowed in September, but was stronger than initially reported in August. Nonfarm payrolls rose by 156,000 jobs in September, missing economist expectations of 175,000. Job gains for August were revised up to 167,000, from an initially reported 151,000. Benchmark 10-year notes were last up 3/32 in price to yield 1.73 percent.

Source: Institute of Trading and Portfolio Management