Market Roundup
- US Feb nonfarm payrolls rise by 242k vs forecast 190k, Avg hourly earnings -0.1% v 0.2% forecast.
- US labor force part rate 62.9% v 62.7%,Avg workweek 34.4 v 34.6 hours forecast.
- Canada’s Ivey purchasing index slows in Feb, 53.4 vs 59 forecast, 66 pvs (SA).
- Commodities rally oil (Clc1) +3.5%, copper +2.31%.
- US bond yields climb on strong employment report, 3,5,7,10-year yields climb to 1-mos highs.
- US dollar falls as drop in US wages suggests dovish Fed; CME Fedwatch has March at 0%, April 4%.
- Released from questioning related to PBR scandal, Brazil’s Lula says “has nothing to fear”.
- Brazil markets rally on political regime change USD/BRL -1%, Bovespa +3.54%, Brazil 3, 5,10-yr yields lower.
- Argentina eyes return to market with USD 11.68bn debt sale, if Congress approves a debt deal for holdout creditors.
Looking Ahead – Economic Data (GMT)
- 22:30 Australia AIG Construction Index * Feb 46.30-previous
- 16:00 China FX Reserves (Monthly) * Feb forecast 3.20t, 3.23t-previous
- 23:50 Japan Foreign Reserves*10billion-previous
- 05:00 Japan Coincident Indicator MM* Jan -0.7- previous
- 05:00 Japan Leading Indicator* Jan-1.2- previous
Looking Ahead – Events, Other Releases (GMT)
- 03:40 Japan- BOJ Gov Haruhiko Kuroda speaks at a forum hosted by Japan’s Yomiuri newspaper
Currency SummariesEUR/USD is likely to find support at 1.0960 levels and currently trading at 1.1005 levels. The pair has made session high at 1.1043 and hit lows at 1.0904 levels. Euro initially slipped against the greenback to hit daily lows at 1.0903, after US employment data was released, by US Labor Department. But later, the euro gained all the lost ground against the US dollar, as investors pared back bullish bets on the greenback following a drop in U.S. wages in February overshadowed strong jobs growth and supported views that the Federal Reserve was in no hurry to hike interest rates. However, the outlook though for a November rate increase by the Federal Reserve remained intact. Average hourly earnings fell 3 cents in February, data from the Labor Department showed. Analysts said traders were fixated on that drop even as nonfarm payrolls increased by 242,000 jobs last month. The euro was last up 0.37 percent against the dollar at $1.0995. The dollar was last up 0.32 percent against the yen at 114.03.GBP/USD is supported in the range of 1.4148 and currently trading at 1.4235 levels. It reached session high at 1.4245 and hit low at 1.4107 levels. Sterling jumped to hit two weeks high against the dollar on Friday as the monthly U.S. employment report led investors to trim bets in favour of the greenback, leaving the pound on track for its best week since late-, It ceded ground against the euro, having gained nearly 1.7 percent this week as the single currency came under pressure on expectations that the European Central Bank is likely to ease policy aggressively next week to boost falling prices and growth. Sterling rose 0.3 percent to $1.4236, its highest since Feb 22 and a far cry from the 7-year low of $1.3836 struck on Feb 29. The dollar weakened after a jobs report showed that while the labour market in the United States was still robust, wage growth was tardy meant the Federal Reserve would raise rates gradually this year and prompted traders to trim bets made in favour of the dollar.USD/CAD is supported at 1.3300 levels and is trading at 1.3312 levels. It has made session high at 1.3427 and lows at 1.3312 levels. The Canadian dollar firmed against US dollar on Friday after solid trade data put bets on Bank of Canada that the central bank may not cut interest soon, even as a surge in U.S. jobs boosted Federal Reserve rate hike prospects. Canadian exports are finally starting to show signs of a persistent recovery, with analysts cheered by healthy volumes in January that rose sharply thanks to the weak domestic dollar and continued U.S. growth. Statistics Canada said on Friday that the trade deficit had widened to C$655 million ($489 million) from C$631 million in December, markets paid much more attention to a 3.6 percent jump in volume. The currency’s strongest level of the session was C$1.3390, while its weakest was C$1.3472. On Thursday, it touched its strongest since Dec. 7 at C$1.3372.USD/JPY is supported around 112.80 levels and currently trading at 113.76 levels. It has made session high at 114.25 and low at 113.11 levels. The pair edged higher immediately after US jobs data was released by The U.S. Labor Department to hit daily high at 114.26 levels. But, later in early afternoon the dollar slipped from 114.26 levels to hit lows at 113.76, as investors closed there short buy position and sold off the greenback against Japanese yen. The pair was trading in the late New York session around 113.70 levels. Meanwhile, U.S. employment gains surged in February, the clearest sign yet of labor market strength that could further ease fears the economy was heading into recession and allow the Federal Reserve to gradually raise interest rates this year. Nonfarm payrolls increased by 242,000 jobs last month and 30,000 more jobs were added in December and January than previously reported, the Labor Department said on Friday.Equities RecapEuropean shares rose on Friday after strong U.S jobs data eased concerns about a possible recession in the world’s largest economy, with miners boosted by firmer metals prices and auto stocks making their seventh day of gains in a row.Britain’s blue-chip FTSE 100 index closed up by 1 percent, France’s benchmark CAC-40 index closed up by 0.86 percent, Germany’s DAX ended up 0.71 percent, meanwhile the pan-European Eurofirst 300 index was down up 0.61 percent.Wall Street ended higher on Friday after employment data reduced investors’ worries about a sluggish economy without bolstering fears of an imminent interest rate hike.Dow Jones closed up by 0.35 percent, S&P 500 ended up by 0.30 percent, Nasdaq finished the day up by 0.19 percent.Treasuries RecapU.S. Treasury prices tumbled on Friday after data showed a surge in jobs growth in February, but gains in yields were limited by weak wages data and continued safety bids.The benchmark 10-year note yield rose to 1.902 percent, its highest level in just over a month. The note was last down 15/32 in price to yield 1.882 percent, up from 1.83 percent late on Thursday.The 30-year bond was last down 26/32 in price to yield 2.705 percent, up from 2.66 percent late on Thursday. It reached 2.733 percent, its highest level in about a month.Commodities RecapGold prices were flat on Friday, late in a seesaw session that took prices to a 13-month high twice on technical and underlying investment demand, with a sharp drop in between due to forecast-beating U.S. payrolls data.Spot gold was down 0.2 percent at $1,260.80 an ounce at 3:19 p.m. EST (2019 GMT), after falling 1.1 percent to $1,249.90.U.S. April gold futures settled up 1 percent at $1,270.70 an ounce.Oil jumped on Friday, settling 4 percent higher as strong U.S. jobs data and technical factors encouraged buying that revived this week’s rally after a one-day pause.Brent futures, the global benchmark for crude, settled up $1.65, or 4.5 percent, at $38.72 a barrel.U.S. crude’s West Texas Intermediate (WTI) futures closed up $1.35, or 3.9 percent, at $35.92.
The material has been provided by InstaForex Company – www.instaforex.com