Spreadex Market Update

FTSE hits fresh pandemic high on mining gains, high stakes NFPs still to come



On a hugely important nonfarm Friday, the European markets found themselves heading towards a basket of new highs.

As was the case earlier in the week, the FTSE’s mining stocks did the UK index a solid, propelling it to a pandemic peak thanks to all-time highs from iron ore and copper.

Adding another 35 points, the FTSE is trading at 7,100, a price it last saw in late-February 2020. It is a sign of just how stark that month’s losses were, however, that the index still has 300-plus points to go before it has recovered all of its initial pandemic-plunge.

The FTSE could’ve been even higher if the pound wasn’t also rebounding after yesterday’s Bank of England rollercoaster, adding 0.3% against the dollar and 0.1% against the euro.

Over in the Eurozone the situation was similarly celebratory. The CAC continued to push beyond 6,330 as it added 0.3%, while the DAX was back above 15,300 for the first time in over a week following a 0.9% surge.

At present, the Dow Jones isn’t willing to join in with the European excitement. Instead, the futures point to an unchanged open – very much a placeholder state, however, until the release of this month’s nonfarm jobs report.

With Jerome Powell seeking a ‘string’ of strong jobs reports – with a string defined as ‘more than one’ – before he will consider tapering the Federal Reserve’s current stimulus, this Friday’s release is as high stakes as they come.

The headline number from April was the addition of 916,000 jobs. This time out, the figure is set to be even more robust, with analysts expecting 990,000. Which, if investors decide that is enough to shift the Fed towards reducing its current stimulus levels, could pose a problem for the US markets.

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