Markets:
- Gold rises from $13 to $1924
- The price of WTI rose $1.86 to $73.66
- US 10-year yield rose 2.3 basis points to 4.06%
- The Standard & Poor’s 500 fell 0.2%.
- The Japanese yen rose, and the US dollar lagged
Initial reaction to the nonfarm payrolls report was mixed as the weaker headline competed with higher-than-expected wage growth. The dollar fell and then recouped most of its losses.
From there, the bond market took over. Yields began to decline and 2sec fell to 5%, kicking off a strong decline in the US dollar. Selling USD/JPY today was particularly notable and certainly raised some eyebrows as to what the Ministry of Finance or the Bank of Japan would offer, but it could also be profit-taking.
The British Pound and the Euro were particularly awful as the bot added about 90 pips from the early New York levels. Cable tried June’s high and matched it to the point but couldn’t make it and returned a handful of points late.
Commodity currencies benefited exponentially from higher commodity prices and improved risk appetite, which led to some solid gains. The Loonie lagged behind its teammates despite another strong career title. One of the reasons may be weak wage growth in the employment report. The Bank of Canada’s decision next week will be a big one with the implied possibility of a rate hike to 67%.
I wish you a nice weekend.
