US NFP data

US NFP data
This was really a test of the sentiment among employers and it has shown that water is warm. The overall picture says that the report is solid and nothing is shocking. Most of the emphasis was towards the wage growth and labour participation rate and the data has shown that wage growth has shown a positive number while the participation rate was steady. This has painted a shown image

Trump administration is going to have a very close look at this number and they will advise the president-elect how to boost hiring. He has promised to create 25 million jobs in the coming years. But looking at this from a mathematical perspective, the unemployment rate needs to be negative to achieve that. So the idea of creating 25 million jobs, with close borders, is really an idea difficult to digest.

Moreover, Trump is all about “produce in America”, corporates will invest more heavily in the technology sector to make the system less reliant on labour intensive jobs to keep the cost lower. At the same time, highly paid jobs are also frequently being replaced with new technology. This will have an impact on the employment rate in the years ahead.

Gold

The US NFP data has taken some shine off the yellow metal. In response to this report, traders have started to ease off from their bullish positions. We expect this move to fade somewhat during next week as investors do not feel immensely confident about the health of the US economy as the headline number missed the forecast, while the Fed is betting their interest rate hike case on trump’s fiscal spending. The near term support is at 1159 while the resistance is at 1200

Trump Tweets
Toyota also came under pressure after the president-elect opened fire on twitter. It is about the border tax which is making a number of corporates changing their mind to move their operations back to the US. However, our concern is that this is going to push the inflation even higher and the consumers may not have the equivalent purchasing power to keep up with it. This can bring some serious threats for the economy in the days ahead.

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