MKS PAMP Group - Europe/US Market Update

RANGES: Europe/US Markets: 

MACRO: 

- US equities were higher on mixed payroll data and President Trump signing an executive order aimed at rolling back the Dodd-Frank Act. 
- The Dow found its way back over 20k and the Nasdaq posted a fresh record high. 
- The Dow Jones advanced 186.55 points, the S&P 500 firmed 16.57 points, whilst the Nasdaq added 30.569 points. 
- There were wins for financials (+2%), energy (+0.93%), and industrials (+0.89%). whilst discretionary (-0.1%) was the lone laggard. 
- European shares were higher, the EuroSTOXX gained 0.6%, the German DAX rose 0.2%, whilst the UK FTSE added 0.7%. 
- The VIX gauge lost 8.1% to 10.97. 
- The dollar index crept up 0.08% to 99.868, the EUR traded down to 1.0761, whilst USD JPY traded up to 113.20. 
- US treasury yields were lower, 2 year yields lost 0.8 bps to 1.197% whilst 10 year yields shed 0.9 bps to 2.465%. 
- Oil markets were higher, Brent put on 0.3% to $56.74 whilst WTI firmed 0.6% to $53.85. 
- Base metals were mostly lower, with copper (1.9%) the biggest loser. 
- In US economic data, non-farm payrolls grew 227k during January, the largest increase in 4 months and well ahead of the markets 180k expectation. 
- Private payrolls added 237k, well ahead of the 175k estimate, and the unemployment rate rose slightly to 4.8%. 
- Wage growth was weak, average hourly earnings up 0.1% m/m vs a 0.3% estimate, whilst y/y wage growth slowed to 2.5%. 
- The slow wage growth raised concerns that the FOMC may not raise interest rates in March. 
- The ISM non-manufacturing index fell to 56.5% in January from 56.6 in December. 
- The Markit non-manufacturing PMI rose to 55.6, its highest reading since November 2015. 
- US factory orders increased 1.3% in December, outpacing the forecast 0.5%. 
- In Chinese economic news, the PBoC raised the 7-day reverse repo rate by 10 bps to 2.35%, suggesting the central bank will adopt a flexible rates regime in 2017. 

PRECIOUS: 

- Strong session for the precious as the weak wage growth data created FOMC rate hike uncertainty. 
- Choppy trade during Asian hours saw the yellow metal end up where it started on the first trading day back from the Chinese New Year holiday. 
- London were sellers early on, pushing the market down to test the $1210 level. 
- The US dollar dropped on the US jobs report which prompted gold to rally sharply to the days high of 1221.35. 
- There was a dip in NY afternoon trading but the market recovered to finish just under $1220. 
- The Philadelphia gold and silver index fell 0.2%. 
- PGMs were mixed, platinum found enough support to close above $1000 whilst palladium ended lower for the day. 
- Gold ETFs bought 143k ozs 

PRE-ASIA COMMENTS 

- Gold finding the bid in early Asian trade. 
- Asian markets open higher on Wall St's lead. 
- Ahead today: 
EU Retail PMI 
Germany Factory Orders 
Germany Construction PMI 
ECB Draghi Speech