Spreadex Market Update

Non-farm Friday gives Dow Jones hawkish headache, Bitcoin pulls back from brink



The US open made a miserable day all the worse for the European markets, while Bitcoin managed to pull back from the brink.

Following Wednesday’s hawkish hold from the Federal Reserve, there was arguably more interest in this non-farm Friday than there has been for a while. And, luckily for the ailing dollar, the numbers didn’t disappoint: the headline figure came in at 200k, far higher than both the 181k expected and the 160k posted in January, with wage growth also outperforming forecasts to remain unchanged at 0.3%.

This, alongside a better than expected consumer sentiment reading from the University of Michigan, allowed the dollar to regain some ground lost this week. Against the pound the greenback rose 1%, sending cable back below $1.413, while against the euro the dollar jumped 0.7%, taking the currency away from yesterday’s $1.25-crossing 3 and a bit year peak.

All this hawkishness was toxic for the Dow Jones, which plunged 300 points once the bell rang on Wall Street to hit 25900 for the first time in over a fortnight. This Dow drop only exacerbated the losses in Europe; the DAX and CAC both fell 1.3%, with the former on track for its worst close since September last year, while the FTSE slipped 0.7% to strike a sub-7450, near 8 week nadir.

As for Bitcoin, while things are still bad, they are nowhere near as disastrous as they were at lunchtime. It had at one point found itself trading at $7750, a price not seen since the end of November, only for a wave of buyers to rescue it from those lows and send it back above $8650. Still, it’s certainly been a week to forget for the cryptocurrency, with a hat-trick of bad news – a shift in regulations in South Korea, a Facebook ban on ads for the product, and an investigation by the US CFTC – causing it to shed around $3000 per Bitcoin.

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