Stocks pullback further as CAD gains on jobs data

Summary:

• Further declines in equities with DE30 falling below 11000

• German finance minister urges firm to prepare for no-deal Brexit

• FTSE also moving lower

• CAD jumps after another strong jobs print

• Ripple working with 10 top universities

There’s been more selling seen in equities today with the US benchmarks all moving below Thursday’s lows. In Europe, the Dax has moved back below the 11000 mark and trades firmly lower in the past couple of days. Barring a strong bounce into the weekend these markets look set to end on, or near their weekly lows and therefore print pretty negative W1 candles

Olaf Scholz, the German Finance Minister, urged companies from the domestic financial sector to prepare for no-deal Brexit. Scholz said that government and regulator is working with the German financial sector to ensure that even in the case of no-deal Brexit no individual company as well as the financial system as a whole would be put in danger under circumstance of the United Kingdom crashing out of the European Union without an agreement in place. Finance Minister added that the German government is likely to pass a law later this month that would give BaFin, the German financial watchdog, additional powers in an event of major financial distress on the markets. Scholz’s remarks are another ones in a series of speeches from the European politicians aimed at warning business about the need to prepare for the worst.

The size and scope of yesterday’s decline for the FTSE was one of the largest of the year so far, and given that there’s a gathering mountain of evidence to suggest that the global economy is slowing, the outlook for stocks going forward remains challenging. The stream of economic data from the Eurozone continues to flash warning signs, with this morning seeing Italian industrial production fall once more, catching most analysts off guard with the consensus calling for an increase. Italy, the 3rd largest eurozone economy, has recently fallen into recession and with Germany seemingly on the brink of joining it, it is no surprise that stock markets in both posted their largest losses of 2019 on Thursday. The year so far has been a good one for equities with the declines at the end of 2018 drifting further back in traders minds as the relief rally has extended, but many of the causes for the losses remain in place and the real test of this move higher will be how the markets react when some selling returns.

Coming exactly one week after its Southern neighbour delivered a stellar set of employment figures, Canada has posted its own set of pleasing numbers from the labour market and provided a boost to the Loonie. For January the Canadian employment change came in at +66k vs an expected +5k, with the prior revised slightly lower to now stand at 8k ( 9k previously). This now marks the best 5-month run of hiring in Canada in 16 years, with an average of 47k jobs added over this period. Aided by the strong jobs number the USDCAD has respected the resistance at the 61.8% fib at 1.3326. This is now a key level to watch going forward and if it holds then a move back towards the 61.8% at 1.3119 is possible.

Most of major cryptocurrencies have moved slightly higher today. However, the largest digital currency - Bitcoin - has not distanced significantly from its opening levels as it has risen only slightly. On the other hand, Litecoin has increased at a healthier pace. According to CoinMarketCap, the capitalization of the crypto market stands a little below the $113 billion handle whereas Bitcoin accounts for roughly 53.2% of this sum. Ripple, the company related to Ripple coin, announced on Thursday that it partnered with other 10 top-tier universities to expand its University Blockchain Research Idea - the number of new members includes some US universities (such as Cornell, Michigan, and Georgetown), the National University of Singapore and the University of Sao Paulo. Last month, Ripple announced that it had teamed up with the Institute for Fintech Research (Tsinghua University). In general, now the idea supports 29 schools all around the world. Note that Ripple introduced the mentioned initiative in June 2018 - it is aimed to support research and education in topics related to blockchain, cryptos and digital payments.