Recent years may have made us accustomed to a world that was slightly safer than it is now. In addition to the obvious human tragedies, these conflicts also act as strong stimuli for nervous reactions from investors.
War in the Middle East?
In case someone happened to be cut off from the media during the weekend, there is a serious military conflict in Israel. Hamas has claimed responsibility for the attacks, although the media does not lack broader blame on the Palestinians as a whole. The current number of victims and rockets launched is in the thousands, making this one of the most significant escalations of military activity in a long-standing history. This is precisely why markets began to react very nervously. The panic was further intensified by the fact that the attacks began at the start of the weekend, when markets could not react. As a result, on opening today, many of these panic movements had their resolutions. On Friday evening, the exchange rate was 3.85 Israeli shekels per dollar. Tonight, at the opening of the markets in Asia, it reached 3.90 shekels, and while writing these words, it reached 3.93 shekels. Oil ended the week with a calming down after strong declines in the region of 84-85 dollars per barrel of brent. Today since the morning we saw 88 dollars, but here the situation is calming down, not escalating.
Data from the American job market
Friday was a peculiar day in terms of data from across the ocean. At first glance, it was weak and unemployment did not fall from 3.8% to 3.7%, as analysts had anticipated. However, on the other hand, 166,000 more people found jobs in the non-agricultural sector than expected. In the private sector it was 103,000, but this is still a very good result. It should be remembered that to reduce unemployment by 0.1% would require roughly 160,000 fewer unemployed individuals. As a result, the American job market is not only not initiating layoffs in preparation for a crisis, but is also still hiring during a period when some companies were noticeably laying off workers. Wages are only increasing by approximately 4.2% annually, but in the US, following recent declines in the rate of price increases, this is a real wage increase. On the major global currency pair, investors could not make a decision. At first, the dollar clearly strengthened against the euro, only to return to the starting point.
Good data from Canada
Simultaneously with US publications, we also had those from Canada. The unemployment rate there did not increase as expected. Similarly, like in the US, more jobs were created than anticipated. Particularly noteworthy, however, is the fact that over 75% of these jobs are part-time. This is still a good result, but it is always the less favorable option. Following these data, the Canadian dollar strengthened against the currency of its only neighbor.
Today, the economic data calendar holds no important readings, which does not change the fact that there is a lot happening on the markets after the weekend.
Maciej Przygórzewski – Chief Analyst at InternetowyKantor.pl and Walutomat
