China Helps the Markets and Commodities

We’re approaching the end of a very interesting week. We had critical decisions from major central banks, great pivots on the charts and we rounded off the week with the Non-Farm Payrolls data from the US.

Friday starts out quite optimistic, and the one to blame for that, or actually be grateful to, is China. Chinese indices rose rapidly on Friday and it is said that the reason for this are rumors that Chinese officials are looking for a way to abandon the “Zero-Covid” policy, which is still killing many aspects of social and economic activity.

This help from Asia allows the European and American indices to smooth out the Fed’s hawkish rhetoric on Wednesday, which as you probably know, was a bit of a mood killer for stock traders.

Speaking of mood killers, we have to mention the Bank of England – another major central bank that delivered their decision on Thursday. There were no surprises there but the Sterling still suffered heavy losses and, on many pairs, entered bearish territory.

On the other, greener side of the market we have oil, which is making new, mid-term highs, driven mostly by those Chinese rumors mentioned above.

Together with oil and rises in other commodities (Gold is up for now +0,8%), commodity currencies like the Canadian dollar and the Australian dollar are also gaining rapidly. Let’s see if the Canadian dollar is able to hold this optimism with incoming data from the job market, where we are expecting a mediocre employment change on 11K and a small rise in unemployment rates (from 5.2% to 5.3%).

By the way, NFP is also expected to be really unimpressive with the consensus being established on 197K, together with a small rise in unemployment rate as well (from 3,5% to 3,6%). For traders who recently changed to winter time, remember, the NFP (and all data from the US) will be published an hour earlier than usual.