Binary Options News : June 9, 2013
Stocks Soar and Metals Plummet on US Jobs
The end of the trading week saw US stocks make strong gains and the metals market making heavy falls as US employment increased by more than had been expected by economists during the month of May.
The largest economy in the world – the U.S. economy – added 175,000 jobs for May, surpassing market expectations for a 170,000 increase following on from the 149,000 jobs that were created in April. The headline US unemployment rate increased to 7.6% in May – approx 11.8 million people, up from the 7.5% recorded in the previous month as more people entered the job market, which pleased the markets.
The figures released for May makes it the third consecutive month that non-farm payrolls have increased by less than 200,000, heightening concerns that the US’s policies of austerity may be harming its economy. The number of long term unemployed in the US – those that have been jobless for 27 weeks or more remained unchanged at 4.4 million accounting for 37.3% of the total unemployed. Whilst the May jobs report provided a strong indication that the US economy is improving, the much anticipated recovery won’t be strong enough most likely to force the Federal Reserve to reduce or stop altogether its $85 billion a month asset purchasing stimulus programs which provides a double win for the US stock markets.
The double win for equities provided by the US jobs figures on Friday was to be seen immediately with as the Dow Jones Industrial Average closed 1.38% higher, the S&P 500 index closed 1.28% higher and the Nasdaq Composite index closed up 1.32%. In Europe, France’s CAC 40 closed up 1.53%, Germany’s DAX 30 closed 1.92% higher and the FTSE 100 closed 1.20% higher.
The USD strengthened on the better than expected jobs data from the US, which halted talk of tapering the stimulus policies in place. The USD was up 0.17% on the EUR, up 0.33% against the GBP, up 0.56% against the JPY, 1.16% against the AUD and up 0.71% against the CHF
The US Jobs report and the strengthened USD meant heavy falls in the metals markets with Gold and the USD usually trading inversely to each other. gold fell 2.36%, Silver fell 4.95% and Copper dropped 1.55%. There was an upturn in Crude Oil however, as the improved jobs data indicates a stronger economy requiring more Crude Oil – up 1.52% at the close of trade.
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