Despite Friday’s non farm payroll-inspired losses, U.S. stocks are still looking strong from both the fundamental and technical points of view. The latest U.S. jobs report has shown that the labor market is continuing to improve at a solid pace, which bodes well for the economy as a whole.
At the beginning of this year, the People’s Bank of China (PBoC) engineered a decline in the renminbi, with the currency experiencing its biggest monthly drop on record against the U.S. dollar in March. The move was designed to dispel the belief that the yuan was a one-way bet and to ease pressure on China’s export sector.
With Janet Yellen confirmed as the new Fed chairman, gold is now focused on the different economic trajectories of the various major economies. The U.S. is strengthening while the U.K. is trying to cool off its hot housing market.
The BOJ releases their policy announcement tomorrow, and the market is expecting no new stimulus from the BOJ, which is perhaps why the Yen is rallying. The Pound is also rallying on more specific policy guidance from Carney and the BOE.