NFP estimates were miles off the mark on Friday. The old cognitive bias is kicking in strong for economists in this turbulent time and I doubt it is the last major deviation we will see in the coming months - though this was certainly a large one.
The initial reaction was a further jump in equity prices & general risk on mood, however it was noticeable how little AUD participated, grinding slightly higher whereas oil was up over 5% & various indices up 2% or more.
Riots continued in the US over the weekend, though were less violent than many perhaps expected, with Trump ordering the National Guard to leave D.C. & New York ending its curfew.
OPEC+ agreed to a month-long extension, with promises that the lack of compliance from some members would be made up. WTI has now made over a 200% rally off the lows & with the extension largely expected and priced in, it may come off in the week ahead.
Weakness In Gold
Gold had a poor week, with its lowest weekly close since March. This was also during days when USD was falling away which should support Gold.
Longer term, Gold is likely to move higher but for now we have everyone piling in to the trade, possibility of better news ahead meaning less monetary stimulus & if it does all fall apart, we know that Gold will be liquidated in a major sell-off. Make or break time this week & we are leaning towards a breakdown.