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Last week’s trade ended on a bit of a high note. Following several volatile days, US equities surged on Friday night, following the release of US Non-Farm Payrolls data, and the reporting of some positive trade war news. It fostered a risk on atmosphere in markets, and that’s setting up a strong start for the ASX200 this morning. Also, one for the bulls: oil market fundamentals were strengthened by OPEC+ plan to cut global crude production. Turning to the week ahead, and it’s going to be huge, with several trial events highlighting the market-calendar – and raising the prospect another breakout in price volatility.
US Non-Farm Payrolls showed a bumper print, allaying some levels of concern that the US economy is winding down for this cycle. The data revealed an additional 266,000 jobs were created in the US last month, well above market expectations, and that the unemployment rate fell back to a 50-year low of 3.5%. Crucially, too, wage growth came in a little softer than expected. It printed slightly lower last month, at 0.2 per cent, keeping the risk for an inflation out-break, and therefore a Fed rate cut next year, relatively low.
News flowed through the market on Friday that Chinese policymakers are in the process of waiving certain, existing tariffs on US soybean and pork products.The good vibes engendered by that story was supported by comments made by Trump trade advisor Larry Kudlow, that trade-negotiators are working “around the clock” and that “progress has been made” on the trade-war. Both news-stories boosted hopes that some sort of “phase-one” trade-deal remains on the table, and the next round of tariff-hikes, scheduled for December 15, will not go ahead.