Global markets rally on strong US payroll data, Europe cues

By Gautam Broker, Research Analyst at CNBC-TV18

The US equity markets rallied on strong US payroll data and positive signals from Europe. US non-farm payrolls increased 1,63,000 as against expectations of 1 lakh while private payrolls rose 1,72,000 as against expectations of 1,10,000. However unemployment rate went up at 8.3% as against 8.2% MoM, which supported a view that QE3 is not ruled out US ISM Services Index was also mildly positive at 52.6 versus 52.1 MoM. Spanish PM indicates willingness to consider asking EFSF/ESM aid if required Move is a precursor to bond buying by ECB as indicated by ECB President Mario Draghi on Thursday Spain PM says he’s ready to seek aid but clarity on pre-conditions for such aid needed first Spanish PM “I will do what I believe to be in the best interest of the Spanish people.” “What I want to know is what these measures are (pre conditions to aid from EFSF/ESM) and what they mean." “If they are appropriate, in light of the circumstances, we will make a decision.” --Bloomberg reports that members of Angela Merkel's coalition are not opposed to ECB’s bond buying Spain 10-year bond yields went back below 7%; Italy was just about 6%; both were down by 30 basis points US markets at close: Dow Jones gained 1.7% at 13,096.2 and S&P 500 Index rose 1.9% to 1,391 while Nasdaq Composite was up 2%. VIX declined 11% to 15.6  European markets at close: DAX shot 4% and CAC surged 4.4%. FTSE went up 2.2% while Spain and Italy rallied over 6.3% US managed to close flat for the week post Friday rally; Dow Jones gained 0.2% and S&P 500 rose 0.4% while Nasdaq Composite was up 0.3% Asia Today Hang Seng and Kospi were up 2.1% Nikkei moved up 1.8% and Taiwan Weighted gained 1.4% Straits Times was up 1.1% and Shanghai went up 0.1% SGX Nifty rallied 0.9% to 5289 Currencies Euro gained 1.7% tot 1.238 against the US dollar on Friday Euro hit a high of 1.244 to the dollar this morning Dollar index fell 1.2% on Friday at 82.4, which hit a low of 82.08 today morning Commodities CRB Index rallied 2% on Friday led by dollar weakness WTI crude gained 4.9% at USD 91.4 a barrel on jobs data and tropical storm Ernesto in Gulf of Mexico Brent crude rose 2.9% to USD 108.94 a barrel - Highest since mid May Unrest in Syria and North sea maintenance shutdown news aided rally in Brent crude.  Spot gold was up 0.9% at USD 1603.5 an ounce while silver moved up 2.4% Comex copper gained 2.3% while LME Copper was up 1.3% Commodities were mildly negative today morning What to watch out for Ben Bernanke speaking at an event today (32nd Conference of the International Association for Research in Income and Wealth) Eurozone Investor Confidence Index