Overnight data once again painted a stronger than forecast economic picture. The market reaction was complicated by the relationship between the stronger economic outlook and the diminishing potential for further central bank support measures. Bond sold off, as well as stocks, and the recent rotation away from tech shares and into cyclicals came to an abrupt halt.

Unemployment numbers for France (7.1% forecast 8.3%) and the US (new jobless claims 963,000 f/c 1,100,000) surprised analysts. Weekly new jobless claims in the US are below 1 million for the first time since the outbreak of the Covid-19 crisis. Investors were concerned that the brighter outlook reduces any pressure on the two main parties to reach agreement on an extension of fiscal support. After a brief moment in the sun, cyclical stocks fell. The Energy sector fared worse, finishing down 2% in US trading.

Despite the concerns gold made a modest move higher. The best performing asset class overnight was cryptocurrencies, bouncing back after a tough run. CMC’s All Crypto Index rose 3.4%, erasing half of the losses over the week.

Data may also drive market action today and tonight. China’s industrial production and retail sales for July are due around mid-session. Analysts expect a 5.2% year on year bounce in production, although retail sales are forecast to show just a 0.1% gain as Chinese consumers remain cautious. French inflation, and US retail sales, productivity and industrial production have potential to accelerate or extinguish the current impulse.

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination. CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information. CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.