Weak NFP Report will Worry the Fed, but Boosts Stocks

Key Points

• The United States only created 75,000 new jobs last month. This was far less than the 175,000 expected.

• Alongside the NFP print, earnings growth dropped to 3.1% and the jobless rate hit a 49 year low of 3.6%.

• It is now being priced in that the Federal Reserve will be forced to cut interest rates once and possibly even twice this year alone.

• As a result, the US Dollar has fallen sharply and the majors like EUR/USD and GBP/USD have both received a nice kick higher.

• The prospect of lower interest rates, and the ability to borrow cheap money that comes with them, has also seen stocks push higher on Wall Street.

• The uncertainty around Trump’s trade policy with both China and southern neighbours Mexico have no doubt contributed to the stunted economic growth seen here.

• With below target inflation numbers setting the stage, if the economy continues on its current path, a July rate cut is certainly on the cards.

Best of probabilities to you.

Dane.

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