The latest US labor market data was disappointing, nonfarm payrolls increased just by 49,000 in January, which is below the average growth estimate of 105,000. The revised indicator for December was even worse, with the Labor Department reporting that the world's largest economy lost 227,000 workplaces compared with a cut of 140,000 earlier. At first glance, the unemployment rate looks much better: 6.3% from 6.7% earlier, but this is partly because the share of the economically active population has decreased.
The salary level is also below expectations. The increase was 0.2%, but the average working week increased to 35 hours from 34.7 previously. In general, the report turned out to be extremely negative, which served as a driver for the decline in the US dollar. Treasury obligations reacted roughly as expected, with 10-year bonds falling from 1.17% to 1.15% within 10 minutes after the report release.
However, later there was an increase in bond and stock market yields. The Treasuries rose to 1.185%. The reason for the optimism was the results of the vote for the economic aid package proposed by Joe Biden. On Friday, in the Senate Hall, the vote was divided as follows: 51 votes in favor and 50 votes opposed. This allows Democrats to draft a stimulus bill in the next few weeks.
As a result, optimism returned to the market. In the European session, the Treasury yield rose to 1.90%. Stock market futures are showing an upward trend.
Main market quotes:
S&P 500 (F) 3,890.12 +9.87 (+0.25%)
Dow Jones 31,148.24 +92.38 (+0.30%)
DAX 14,090.10 +33.38 (+0.24%)
FTSE 100 6,535.76 +46.43 (+0.72%)
USD Index 91.177 +0.209 (+0.23%)
by 2021.02.08, We advise you to get acquainted with the daily forecasts for the major currency pairs.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.Open Account