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Indexes are cutting initial losses by the end of the session. At the time of publication, the US500 is down 0.18%, the US100 is down 0.40%, and the US2000 is down 0.15%.
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We are also seeing a sell-off in the bond, dollar, and cryptocurrency markets. Essentially, investors are maintaining the negative sentiment from the rest of the week. However, attempts at a rebound are visible.
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NFP data came in slightly below expectations (151 thousand new hires vs. a forecast of 160 thousand), but the relatively small deviation from the consensus (in contrast to the sharp drop in ADP) eased concerns about stagflation. The unemployment rate rose from 4% to 4.1%, and household expenditures increased by 0.4% m/m (forecast 0.5%) and 2.9% y/y (forecast 3.4%).
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Jerome Powell emphasized that the U.S. economy is in the right place. Inflation is on track to reach its target, and the labor market is balanced. Tariff policy poses a potential source of inflationary risk, but the Fed will not overreact to a single data reading. Monetary policy is well calibrated to handle various risks.
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Stock markets in Europe ended the week mostly in the red. The German DAX fell by 1.75%, the French CAC40 by 0.95%, the Italian FTSE MIB by 0.5%, and the British FTSE 100 by 0.03%. Meanwhile, the Spanish IBX35 (+0.17%), the Swiss SMI (+0.36%), and the WIG20 (+0.14%) recorded gains.
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Bitcoin is down 1.71% to 88,300 USD, despite Donald Trump's announcement of establishing a strategic Bitcoin reserve. At the time of publication, the first White House conference on cryptocurrencies is also taking place.
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The market did not react optimistically to the news about the Bitcoin reserve because Trump decided, for the time being, to only allocate those Bitcoins already in the possession of the U.S. government.
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Meanwhile, increasing this reserve will not take place through the purchase of new BTC from the market using American taxpayers' money. This information strongly cooled the emotions of investors who expected the U.S. to invest billions in new Bitcoins.
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On the FX market, European currencies dominate today. The euro continues to strengthen against the dollar (EURUSD: +0.43%), as do the pound (GBPUSD: +0.4%) and the franc (CHFUSD: +0.35%). The Swedish krona appreciates the most (USDSEK: -0.7%). The Canadian dollar is losing ground despite Trump’s softened tariff rhetoric (USDCAD: +0.7%), as are the antipodean currencies (AUDUSD: -0.6%, NZDUSD: -0.7%).
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Brent and WTI oil are rebounding after Trump threatened Russia with potential sanctions (1% and 1.15%, respectively). NATGAS futures are sliding 1.9% amid higher projected temperatures in the eastern United States.
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Gold is down 0.10% to 2,907 USD per ounce, trimming gains from earlier in the day. The sell-off in the stock market and the search for liquidity are also exerting selling pressure on gold.
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