Markets:
Gold flat at $1940US 10-year yields up 8.8 bps to 4.18percentWTI crude oil up $2.25 to $85.88S&P 500 up 0.1percentUSD leads, CAD lags
The preliminary market response to the non-farm payrolls report was about what you’d count on — USD promoting, bonds bid — however then it received difficult. The preliminary strikes reversed and bonds offered off, resulting in a powerful bid within the US greenback. The strikes grew more and more aggressive with USD/JPY slumping to 144.45 then hovering to 146.16 — practically 180 pips.
The greenback roared elsewhere as nicely with EUR/USD tumbling to ranges simply above the August lows. That worn out what had been a promising rally this week for the euro bulls.
Cable rose to 1.2713 on the US jobs report then dropped 1.2580 earlier than buying and selling sideways into the US lengthy weekend.
The one foreign money with a comparatively easy transfer was CAD as a poor GDP report sank the loonie initially after which USD power did the remainder. The outcome was a 90-pip rise in USD/CAD to 1.3600, additionally wiping out some respectable progress that had been made earlier within the week.
The large query left to reply is: Why the sudden soar in bond yields on what was a dovish jobs report? Some pointed to modest power within the ISM survey together with the vitality value rise however that is hardly compelling. Different discuss facilities round charge lock promoting and I can not assist however marvel if Chinese language bond sellers have been searching for liquidity. There is not a straightforward reply and the lengthy weekend together with the flip of the calendar have been additionally cited.
The shortage of a transparent rationalization places the US greenback rally on a shaky basis. We’ll need to type it out subsequent week — benefit from the weekend.
