■ U.S. Macro data exhibit weak performance and a mixed Nonfarm Payrolls

■ U.S. equity suffers from a weak economic and a monetary easing averse Fed

■ Nasdaq drop 5.4% during week, to lowest level since Oct 14.

■ Global equity continues to tumble amid U.S. weakness, Asia woes

■ Oil falls to USD 30.89, as high correlation with equity persists

Dampened global sentiment persisted last week. U.S. data in particular has been fairly weak. This included the ISM Non-Manufacturing Composite Index, which slid to a level of 53.5, as well as deteriorating December Factory Orders. December’s Nonfarm print, on the other hand, proved somewhat mixed seeing just 151K jobs added, on Friday. On the other hand, Friday’s data also included another downward nudge in U.S. Unemployment, to 4.9%. Average hourly wages also secured an impressive 0.5% monthly gain, now standing at a total of 2.5% annual increase. This translated to EUR/USD rising some 3.3% during the week, ahead of Friday Nonfarm Payrolls data, and decreasing slightly afterwards, to conclude the week with a 3.03% gain, the largest weekly increase for the currency pair since March of last year. Similarly, the probability derived from U.S. bond markets, for a Fed rate hike in March are now down to just 10%. And the likelihood attributed to an increase during 2016 as a hole slid to just barely above 50%.

With bad news outweighing good news, but not to the extent warranting another Q.E., U.S. equities have showed significant weakness. The S&P500 (SPY) lost a total of 3.1%, in a very rocky weekly session, concluding at a level of 1880.02 points. U.S. tech stocks have been showing unusual weakness with the Nasdaq losing a total of 5.4% during the week. At 4,363 points, the index is below August’s levels, making this its lowest level since October 2014. Large internet firms have been sliding in particular, with Facebook (FB) losing 7.25% during the week, Amazon (AMZN) with -14.46%, Netflix (NFLX) with a 9.85% decline and Alphabet (Google) (GOOG) with a 7.99% decline. Pressure on equities rippled across the Pacific, the Nikkei lost a total of 3.99% during the week. More than 3% of that was a large selloff erupting on Wednesday, feeding off of concerns for East Asian economies. The Hang Seng, similarly, lost 2.01% during the week, owing to a 2.34% Wednesday decline. European Indices suffered from the rock and the hard place with the DAX decreasing a total of 5.22% during the week and the FTSE with a 3.87% decline.

Oil & equity correlation continues

Oil prices continued to prove highly volatile this week. According to a Reuters report, some of this was due to a “sudden liquidation” of a USD 600 M leveraged bet on oil prices. Following a negative opening at the start of the week, oil prices began rapidly rising, hitting USD 33.6 per barrel at some point on Thursday, amid speculation that Turkey may have its forces enter northern Syria, where Russian forces currently operate. The recently high correlation between Equity and oil, however, then kicked in, with global declines in stocks by the end of the week translating to oil ending the week with a USD 2.73 per barrel decline to USD 30.89.