By IFCMarkets

The US shares fell on Friday due to the weak Labour statistics in August. The non-farm payrolls have hit a 5-month low of 173 thousand instead of the forecasted 220 thousand. Such negative data was partly compensated for by the lowered unemployment rate to 5.1% from 5.3% which is the record low since April 2008. The investors have not reached the common ground on how the Labour statistics may influence the Federal Reserve decision on the rate hike. Due to this fact, the US Dollar index change was slight on Friday. Nevertheless, the probability of the rate hike on September 17 decreased from 30% to 20% on the Labour statistics report while it was 50% in mid-July. The volume of shares trade on the US stock exchanges was 6.3 mln. on Friday which is 20% less than the average for the 5 days. Today the US market is closed due to the Public holiday (Labor Day). The corporate forecasts were released. At this moment, the investors expect the total profit of the companies from the S&P 500 Index to decrease by 3.4% and the total revenue to be down by 2.8% in the 3rd quarter. The US Dollar Index advanced 0.8% after the slump of 2.9% in the second quarter. Its strengthening impairs the US products competitiveness. Moreover, the cheaper oil and other commodities are expected to trigger the worse financial results of the relevant corporations.

The EU shares are slightly up after the drop on Friday, the reveal of the mining company’s Glencore plans of paring its debts contributing to this fact. Its shares surged by 8% and triggered the advance of the other mineral companies’ shares as well as the STOXX Europe 600 Basic Resources Index growth of 2%. The significant moves in the EU stock markets are not anticipated in view of the closed US market. Moreover, the Chinese stock market which was closed on Thursday and Friday due to the 2nd World War Victory holidays plunged today in the morning. Today the Shanghai SE Composite Index plummeted by 2.5% which is negative news for the global stock markets. What is more, the Sentix Investor Confidence Index was released early in the morning and it turned out to be negative.

The Nikkei Index grew slightly today after the slump on Friday. The slight weakening of the Yen, which caused the shares growth of the carmakers Toyota Motor and Honda Motor by 1.2%, has contributed to that. Moreover, Toshiba has finally released the accounts for the last financial year and its shares advanced 1.8% on this news. The Nippon Kayaku shares shot up by 12% on the report on the planned certification of its new cure for cancer. In Japan at 1:50 the important macroeconomic data, that is trade balance and the current account in July, the final 2nd quarter GDP and the other data is to be released on Tuesday morning.

In China the foreign trade figures in August that may influence the commodity futures quotations are to be released at 2:00 CET on Tuesday. The growth of the trade balance surplus is expected which is the positive factor for the economy and may support the stock market. Nevertheless, according to the forecasts, such a growth shall be provoked by the contracted export and import which may have negative impact on some commodity futures. Today, given the closed US stock exchanges, we do not expect any significant price movements in commodity futures.

The Copper today is on the increase due to the Glencore statement on the possible contraction of its production in Congo and Zambia. Glencore is going to sell the assets on $2.5 bln. aiming at paring its debts by a third till the end of the next year. Moreover, the market participants count on the growing demand for copper in China. Its government has approved of the $12.1 bln. allocation on building the new roads and bridges. The Rio Tinto Corp is one of the world leaders in copper production and it is expecting the copper deficit in the world market in the following 2-3 years due to the growing demand from the energy producers.

Market Analysis provided by IFCMarkets