Morning Minutes

Gold Clears $2,000/oz as Investors Digest Mixed Payroll and PMI Reports




Trading action in world markets has been mixed overnight. US index futures are flat this morning after major US markets fell 0.6% yesterday. In Europe, the FTSE is up 0.4% and the Dax is down 0.3%. Asia Pacific trading saw Tokyo fall 1.7%, Hong Kong lose 0.7% Seoul gain 0.6%, and Shanghai rise 0.5%.

Economic news over the last twelve hours has been very mixed adding to investor indecision. US ADP payrolls were mixed with the headline number disappointing (145K vs street 200K) but last month’s number being revised upward by 19K. This could be seen as a sign of a slowing economy but also as an indication that previous interest rate hikes have started to bite and the Fed may not need to raise rates much further. In contrast, the Reserve Bank of New Zealand announced a surprise 0.50% increase in its overnight rate to 5.25% and indicated in its statement that it expects its economy to slow from its campaign to get inflation down.

Meanwhile Service PMI reports from around the world were positive with most coming in above 50.0 in expansion territory. Most numbers were close to or above street expectations with Australia, Japan and Spain doing particularly well. US ISM Service PMI (street 54.5 vs previous 55.1) is due at 10:00 am EDT.

Amid an uncertain global economy, alternative currencies continue to attract renewed interest. Gold has broken out over $2,000/oz today trading near $2,045/oz, up 0.3%. Silver, however, is down 0.5%. Cryptocurrencies are having a good day with Bitcoin up 1.4% and Ethereum up 2.4%. Commodities are down slightly with WTI and Brent Crude Oil, plus Copper all down 0.2% as energy markets continue to consolidate recent gains.   

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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