Friday August 7, 2009 - 13:13:05 GMT
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Forex Hound - www.forexhound.com
Bulls Return to Equity Markets after Better U.S. Unemployment Report
This morning‚Äôs better than expected U.S. Unemployment Report is helping to drive equity markets higher after two day‚Äôs of sideways to lower trading. Today‚Äôs report which showed a loss of 247,000 jobs, well below the consensus of 325,000, immediately sent equity futures higher. The unemployment rate also declined which may be an indication that today‚Äôs rally in the equities may be sustained all day.
September Treasury Bonds and Notes fell after the release of the U.S. Non-Farm Payrolls number as yields rose and money flocked to the equity markets. Traders are likely to pressure these markets all day if equities can maintain their bullishness. Furthermore, investors may also begin focusing on the record amount of supply which is going to hit the debt market next week during the Treasury auction.
The U.S. Dollar is trading weaker following the release of the bullish employment report. The early reaction has traders increasing demand for risk. This market could get tricky because traders may actually buy the Dollar in expectations of a faster than expected recovery. Look for volatility.
The direction of December Gold will be dictated by the direction of the Dollar. A weaker Dollar will send gold higher. A strong Dollar will pressure gold.
September Crude Oil is trading higher. An improvement in the economy is a sign that demand may increase for energy products. Traders may take their clues from the currency markets however. A stronger Euro will help rally the crude oil. A turnaround in the Euro to the downside will put pressure on the energy complex.
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