Financial markets skittish ahead of US NFP - ANZ

The ANZ Research Team provides a summary of Thursday's action, noting that financial markets are skittish ahead of nonfarm payrolls, with the NY session unwinding gains made through the European session.

Key Quotes

The NY morning saw S&P rise on light volumes, matching the performance of European bourses. The Euro Stoxx closed up 0.7%; FTSE 100 up 1.1%; and DAX up 0.5%. The S&P 500 was up as much as 0.4%, but finished the day down 0.1% as energy stocks were lead lower on lower oil prices. Part of the trigger for lower oil prices was a smaller than expected drawdown in US inventories. US Treasuries fell as labour market data there showed labour conditions are solid.

Currency trading remains volatile, with GBP on the back-foot, EUR lower and JPY back below 101. The AUD fell back below 0.75 overnight on the back of the credit outlook downgrade, while the NZD moved higher following comments from RBNZ Deputy Governor Spencer. AUD/NZD has dropped to 1.0350. Credit spreads were generally unchanged, including Australian banks following the outlook downgrade.