An extraordinary week greeted the market as Hurricane Sandy wreaked havoc on the American Northeast this week, leaving 8.5 million people with devastated homes, infrastructures, and businesses, and majority with no power, heat, water, and phone service.
Financial markets were not affected, thanks to measures imposed as early as the prior week. This week ended on a better footing as the market welcomed a better-than-expected US employment data on Friday. According to authorities, the US labor market added 171,000 jobs, almost 50,000 more than analysts' consensus estimates. Unemployment rate stayed at 7.9 percent, compared to Canada's 7.4 percent unemployment rate which was reported at the same time.
Stocks, Bonds, and Commodities
The US made history this week as Hurricane Sandy battered the US East Coast, particularly New York City, forcing the most prolonged shutdown of US stock trading in 124 years. New York City, the world's biggest financial market and home to nearly 170,000 workers employed in the securities industry, halted trading for 48 hours on October 29 and 30 when the Hurricane hit. Floods and power outages ripped through New York, New Jersey, and nearby areas, but no unfavorable incident transpired in the financial market. Bond trading was also halted during that time.
According to Bloomberg data, quarterly results released by 71 companies beat analysts’ estimates, giving S&P 500 a 0.2 percent gain this three-day trading week. Meanwhile, Dow and Nasdaq fell slightly over one percent on Friday. Most of Europe and Asia were favorably buoyed this week. Japan's Nikkei reached a one-week high on US recovery hopes.
Gold fell two percent to its two-month low of after the release of the better-than-forecast US Non-Farm Payrolls data. Oil dropped to its lowest in nearly four months on concerns that Hurricane Sandy-led shutdowns of oil refineries in the US East Coast aided in increasing the supplies.
It was another tepid trading week for currencies, mimicking the moves in the stock market.
EURUSD maintained its consolidating tone with a bearish bias. 1.2800 is an important area for the bulls to maintain; else market can expect a move towards 1.2400 to 1.2700 next week. Meanwhile, GBPUSD needs to sustain its hold of the 1.5900 to 1.6000 area if buyers are planning another visit to the 1.6300 highs reached in late September.
For AUDUSD, trading was also lackluster, ending the week with just a 90-pip trading range. The slow and weak upmove created by AUDUSD in the first four days of the week was quickly erased on Friday, ending the week at 1.0334, 30 pips lower than the weekly open.
The Week Ahead
Now that the US non-farm payroll week is behind us, the market will be eagerly looking forward to the US Presidential and Congressional Elections this coming week. Aside from these, the market will set its sights on the first day of two-day G20 meetings, Australia's Retail Sales and Trade Balance, Spain's Unemployment, UK's Services PMI, Canada's Building Permits, and the US ISM Non-Manufacturing MPI data on Monday; On Tuesday, Australia's rate announcement and statement, UK's Manufacturing Production, and Canada's Ivey PMI
data; On Wednesday, New Zealand central bank's Financial Stability Report, Switzerland's
Currency Reserves and CPI; On Thursday, New Zealand and Australia's Employment data,
Eurogroup meetings, UK and Europe's rate announcement, UK's Policy Rate Statement, and ECB's press conference, US and Canada's trade balance, and US Unemployment Claims; and lastly on Friday, Australia's RBA Monetary Policy Statement, China's CPI and PPI, and US preliminary University of Michigan’s Consumer Sentiment data.
Daylight Saving Time or DST will take effect in Canada and the US starting this week.