USD: Jobs data and yields in focus – Danske Bank

Danske Research Team highlights that the key release is the US February jobs report, where they expect Nonfarm Payrolls to slow to 70k and unemployment to hold at 4.3%. Weekly jobless claims remain low and layoffs are easing, while productivity has cooled and…

Danske Research Team highlights that the key release is the US February jobs report, where they expect Nonfarm Payrolls to slow to 70k and unemployment to hold at 4.3%. Weekly jobless claims remain low and layoffs are easing, while productivity has cooled and unit labour costs have risen. A strong report could further pressure US bond yields and swap rates. "The most important release today is the US February jobs report.

Early high frequency indicators, like jobless claims, ADP's weekly private sector employment estimate and Indeed Hiring Lab's daily online job postings have generally signalled improving labour market conditions into February. We still expect a modest slowdown in NFP growth to +70k from 130k in January and unemployment rate to remain steady at 4.3%." "In the US, weekly jobless claims remained steady at low levels, unchanged at 213k for the week ending 28 February.

Continuing claims ticked slightly higher, but not meaningfully so. The February Challenger report showed that even though firms' hiring announcements remained subdued, layoff announcements declined sharply to 48.3k from January's 108k SA." "Flash Q4 productivity growth slowed to 2.8% q/q AR (Q3: 5.2%), reflecting the weaker-than-expected GDP print from earlier. This lifted unit labour cost growth to 2.8% q/q AR (Q3: -1.8%).

In the big picture, US labour cost pressures have cooled to modest levels in a historical context." "Today, the US labour market report is released and if the report comes out to the strong side it will add to the pressure on bond yields and swap rates. We have seen a rise in both the VIX index and the Move index (equity and rates volatility) as well as credit spreads (such as ITRAX) but there have been modest moves in the Schatz ASW-spread, so we are still not seeing a significant risk-off move as we have seen in the past." (This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.) The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts.

The content includes notes by commercial as well as additional insights by internal and external analysts. EUR/USD has reversed part of its earlier pullback and is now edging back towards the key 1.1600 level. The rebound follows a knee-jerk in the US Dollar after the latest NFP report showed the US economy unexpectedly lost 92K jobs in February. Meanwhile, the deteriorating geopolitical backdrop continues to lend support to the Greenback, limiting the pair’s recovery.

GBP/USD is falling back toward 1.3300 in the European session on Friday. A cautious market mood and renewed US Dollar uptick drag the pair lower. The focus now remains on the US NFP data and Middle East headlines for fresh trading incentives.  Gold prices staged a turnaround on Friday, reversing the earlier decline and trading just above the $5,170 mark per troy ounce. The yellow metal continues to draw support from safe haven demand linked to tensions in the Middle East, although gains remain measured as investors weigh the prospect of higher inflation.

After the US and Israel struck Iran, the consensus among most experts was for Bitcoin and the crypto market to see another round of sharp declines. Well, it didn’t happen. And almost one week afterward, crypto appears to be weathering the storm much better than other asset classes considered risky.  February payrolls were much weaker than expected for February. The headline number was -92k, lower than the 55k expected for Feb, and the 130k job increases for January.

The unemployment rate ticked up slightly to 4.4% from 4.3%. After the US and Israel struck Iran, the consensus among most experts was for Bitcoin and the crypto market to see another round of sharp declines. Well, it didn’t happen. And almost one week afterward, crypto appears to be weathering the storm much better than other asset classes considered risky.  Information on these pages contains forward-looking statements that involve risks and uncertainties.

Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature.

Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

The author will not be held responsible for information that is found at the end of links posted on this page. If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Summary

This report covers the latest developments in artificial intelligence. The information presented highlights key changes and updates that are relevant to those following this topic.

---