US Dollar extended its gains heading into the weekly close, following upbeat employment-related data (Non-Farm Payrolls) and soaring government bond yields. The US created 379K new jobs in February, more than doubling the market’s expectations, while the unemployment rate shrank to 6.2%. Stocks rallied on the news, but also government bond yields. The yield on the benchmark 10-year Treasury note hit 1.626%, a fresh one-year high, finishing the week at 1.577%.
On Saturday, the US Senate passed the $1.9 trillion stimulus package, although some changes were introduced regarding the increase of the minimum wage to $15 per hour and the number of people who will qualify for a $1,400 stimulus payment. The final vote was 50-49, with all Democrats voting in favour of the bill and all Republicans voting against it. The bill, called American Rescue Plan Act, now moved back to the House, where it will be voted on Tuesday.
Chinese trade figures released over the weekend showed the Trade Balance surplus in dollar terms resulted in $103.25 billion, much better than anticipated. Exports rose 50.1% while imports were up by 14.5%. The news may support risk-on sentiment at the weekly opening.
Commodities, Brent crude oil futures rose 4.0% to $69.35 – a 14-month high, copper rose 2.3%, iron ore fell 2.1% to $174.20, and gold rose 0.2%
Overnight Currency Ranges
AUD/USD 0.7624 0.7727
EUR/USD 1.1893 1.19765
GBP/USD 1.3779 1.3906
USD/JPY 107.82 108.645
NZD/USD 0.71 0.7195
USD/CAD 1.2646 1.2736
USD/CNH 6.4797 6.5285
AUD/JPY 82.75 83.59
AUD/NZD 1.0721 1.0767
AUD/USD traded to a low of 0.7624 on Friday helped mainly by the broad based USD strength. Demand ahead of 0.7600 should prove difficult to crack on the first attempt while topside resistance is expected back toward 0.7760/80.
Event Risk Data Today
China: Expectations February foreign direct investment to be released between 8-18March. At 4.6%yr in January, the annual pace has moderated from a peak in September.
Euro Area: March Sentix investor confidence is due; the recovery stalled in February on extended lockdowns and the slow rollout of the vaccine.
Germany: January industrial production is expected to contract 1.5%, with extended lockdowns an ongoing headwind to output.
US: January wholesale inventories