Asian stocks rally after US jobless rate dropped and Japanese machinery orders increased.

  • The US dollar traded close a one-week high against the euro and a seven-week high versus the yen as the US cut fewer jobs last month and Japanese machinery orders increased.
  • The advance for the greenback on NFP Friday the 7th of August marked a return to the view that good US economic indicators should benefit the currency, or in other words a positive correlation between the USD and US equity markets.
  • Traders are now speculating that the Federal Reserve will raise the interest sooner than expected.  Futures on the Chicago Board of Trade indicated a 60% chance the Fed will increase the key interest rate from its range of zero to 0.25 percent by its January meeting.
  • With a stronger dollar, investor demand for commodities priced in the US currency drops.  Crude Oil fell from a five-week intraday high of $72.84 a barrel on a stronger USD and as gasoline futures declined on signs of slowing seasonal demand for auto fuel late in the US summer.

Currency to watch out for: EURUSD & GBPUSD

  • The EURUSD pivot point is at 1.4150 with a preference to enter into long positions at 1.4160
  • The GBPUSD pivot point is at 1.6650 with a preference to enter into long positions at 1.6660

Today's calendar and market movers:

  • EU Sentix Investor Confidence
  • And the highlight of this week is the FOMC Statement this Wednesday from the US, as investors will look for signals of an exit strategy from its efforts to boost up the financial system.

Stocks:

  • Wall Street advanced higher on Friday with the Dow Jones initially breaking above the 9400 figure, marking a new high at 9438 before closing the week at 9370 or a 1.23% increase.  The S&P closed higher by 1.34% and the NASDAQ by 1.37%.
  • As of 06:15 GMT the Nikkei is at 1.22% and the Hang Seng at 2.21%