MARKET WRAP: NFP disappoints, FTSE falls, USD declines, cryptos rally

imageEconomy3 hours ago (Sep 03, 2021 16:35)

© Reuters

Key Points

  • FTSE 100 closing price of 7,140.3, -0.33%
  • US Nonfarm Payrolls misses expectations, could delay taper
  • FTSE falls after data
  • USD declines
  • Oil marginally lower
  • Cryptocurrencies jump, Ethereum breaks $4,000

By Samuel Indyk – The FTSE 100 declined on Friday following the latest US labour market report which showed a disappointing number of jobs created during the month of August. The Bureau of Labor Statistics said just 235,000 nonfarm payrolls were added during the month, well below the 750,000 expected.

The data all but rules out the Fed beginning to taper asset purchases at their September meeting.

“After today’s soft figure employment does indeed remain 5.33mn below the February 2020 peak so this will likely dampen the enthusiasm from several regional Fed Presidents for a September taper,” said ING analysts in a research note.

Major indices in the US were mixed following the data. The tech-heavy Nasdaq outperformed, benefitting from the prospects of more QE for longer, while the Dow Jones and S&P 500 both declined as the economic recovery still looks like it has a long way to go to get back to pre-pandemic levels.

The FTSE 100 also declined with weakness relatively broad-based. IAG (LON:ICAG) and Rolls-Royce (LON:RR) underperformed amid more evidence that the spread of the Delta variant in the US is having an impact on the economy, potentially delaying the recovery in the international travel industry.

Shares in Sanne Group (LON:SNNS) were trading lower after Cinven bowed out of making a bid for the company, allowing asset management services provider to go ahead with the buyout by Apex Group.

The US Dollar Index was lower after the US jobs data following the huge miss on the headline. This helped lift GBP/USD to its highest level since 16th August.

WTI and Brent crude futures were both trading marginally lower despite the weaker USD. The soft US jobs data shows that the economic recovery still has a way to go before returning to normal and means oil demand may take longer to return to normal than previously thought.

Cryptocurrencies jumped higher following the data with all the major coins trading with firm gains. Bitcoin broke above recent highs to its highest level since May, while Ethereum traded above $4,000 for the first time since 15th May.


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MARKET WRAP: NFP disappoints, FTSE falls, USD declines, cryptos rally

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