MKS PAMP Group - Europe/US Markets

MACRO:

- U.S. Nonfarm Payrolls outpaced expectations during November, increasing
211,000 (exp: 200,000), while October saw a +27,000 revision to 298,000
(prev: 271,000) and September's print gained 8,000 to 145,000 (prev:
137,000). Employment within the construction sector (+46,000) led the
headline print higher, while food services / drinks services added +32,000
jobs, retail trade employment gained +31,000 jobs, professional and
technical services added +28,000 jobs and healthcare increased +24,000
jobs. The mining sector again weighed on the print, giving up -11,000 jobs
and information lost -12,000 jobs.
- The Unemployment rate held at 5.0% as expected and the participation
ticked higher to 62.5% from 62.4% previously.
- Equity markets in the U.S. surged higher following the jobs data release,
however gains were marginally tempered by further weakness in energy
markets. The DJIA jumped +2.12% to 17,847.63 points, just shading the S&P
500's +2.05% gain as telecommunications (+2.67%) and financials (+2.66%)
led the way higher, while energy (-0.52%) was the only sector to end within
negative territory.
- European stock markets lagged behind their U.S. counterparts on Friday,
sliding into negative territory as the disappointment following the ECB's
Thursday announcement continued. In Germany the Dax returned -0.34% as the
Bundesbank cut its 2016 inflation forecast to +1.1% from +1.8% previously,
predominately a result of lower oil prices. Generally softer commodity
related stocks saw the UK FTSE 100 to a -0.59% decline and the FTSEurofirst
300 eased -0.34%.
- Oil prices declined further on Friday as OPEC decided not to restrict
production to control prices, rather continue at current production levels.
The announcement saw the global benchmark Brent Crude trade to a 6-year low
of USD $42.67 per barrel and a close around USD $43.25 or down -1.9%, while
WTI in New York dropped below USD $40 per barrel and returned -2.8% for the
session.


PRECIOUS:

- Gold surged higher on Friday following the U.S. jobs data as the USD
failed to regain ascendancy following Thursday's ECB driven decline.
- A short squeeze saw the yellow metal trade as high as USD $1,089.10 (a
3-week high) to book a +2.3% advance for the session.
- The recent COTR data continues to show an escalation of shorts and if the
USD is unable to rally we may see further squeezes towards USD $1,095 -
$1,100 in the short term leading into next weeks FOMC meeting.
- Silver added a staggering +3.2% on Friday, surging through recent
resistance around USD $14.25 - $14.30 to print a USD $14.55 session high.
- The close above USD $14.50 is likely to encourage fresh interest in the
grey metal, with targets extending towards early November price levels of
USD $14.75+
- Platinum surged +3.4% post payrolls to target USD $896 and palladium
out-performed to spike +4.6% higher.


PRE-ASIA COMMENTS:

- Light profit taking is likely during Asian trade today as we open to find
the precious metals markedly higher following Friday nights price action.
- Thus far there has been little change in currency markets with the USD
holding around Friday closing levels, supporting the metals in early trade.
- Data releases tonight are thin with German Industrial Production being
the main print of note.