Dollar, US Treasuries Rise on Solid Jobs Report

Wall Street
FILE PHOTO: American flags hang from the facade of the New York Stock Exchange (NYSE) building after the start of Thursday’s trading session in Manhattan in New York City, New York, U.S., January 28, 2021. REUTERS/Mike Segar/File Photo

NEW YORK (TFT News) ⸺ In light trading on Friday, the dollar and the yield on the benchmark Treasury note climbed after data showed an increase in American employment in March, poised to be the strongest US economic recovery in decades.

In the Americas, Europe, and elsewhere, equity markets were closed for Good Friday, but it is not a government holiday in the United States, and the Labor Department published the closely tracked non-farm payrolls report.

In March, the US economy gained 916,000 jobs, beating economists’ estimates of 647,000, and the unemployment rate dropped to 6.0 percent from 6.2 percent the previous month. According to the jobs report, the February employment numbers were revised upwards.

Following the report, futures for the S&P 500 stock index rose 0.43%.

Despite the strong figures, the Federal Reserve’s position on monetary policy will remain unchanged, according to Steven Ricchiuto, US chief economist at Mizuho Securities USA in New York.

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“The economy’s bouncing back, but it’s not producing the things that are going to change the direction of monetary policy,” Ricchiuto said. “We’re going to test the 1.77% level (in the 10-year Treasury note), but I’m not sure it’s going to break (through) on this number.”

The yield on the 10-year US Treasury note increased by 3.5 basis points to 1.7143%, but it remains below the 14-month high of 1.776% hit on Tuesday.

Treasury yields have risen in response to US President Joe Biden’s plans for $2.3 trillion in infrastructure spending and the accelerated deployment of COVID-19 vaccines, which have improved the economic outlook.

According to Russell Price, chief economist at Ameriprise Financial Services Inc in Troy, Michigan, the March labor market report is the first of what are likely to be strong jobs reports expected in the coming months.

“The outlook looks very good,” Price said. But “in my mind the biggest constraint could be the ability of the supply side of the economy to fulfill consumer wishes.”

On Thursday, stocks on Wall Street soared, with the S&P 500 index reaching a new high as it crossed the 4,000 mark, and the benchmark Deutsche Boerse DAX index in Germany also reaching new highs. Global manufacturing data was reported to be the strongest in decades, boosting stock prices.

The dollar rose for the third week in a row. According to Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, the labor market’s resilience is likely to support the dollar.

As more investors bet on economic growth, the dollar’s climb to multi-month highs is likely to continue. The dollar index increased by 0.122%, while the euro fell 0.13% to $1.176. At 110.68 per dollar, the Japanese yen lost 0.09% against the US dollar.

Overnight, Asian shares soared as hopes for a global economic rebound boosted stock markets in Japan, China, and South Korea.

Stocks in China gained for the second week in a row as recent data indicated that the world’s second-largest economy is on the mend. The Shanghai Composite Index and the CSI300 index both closed at nearly four-week highs.

The Nikkei in Tokyo reached a two-week high, with semiconductor-related stocks leading the market as the industry seeks to ramp up manufacturing amid a global chip shortage.

South Korean stocks ended the week with their biggest weekly gain in nearly two months, as investors bet on a stimulus-fueled economic recovery.

Gold prices dropped 0.08% to $1,728.84 per ounce on the spot market.

TFT News Team

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