Data To Show Surging US Growth, But Is That Enough To Lend The Dollar Support?

Overview: Ahead of what is expected to be reports confirming the surging US economy, the dollar remains on its back foot, unable to sustain even modest upticks. The euro has drawn closer to $1.20, and the dollar is holding below JPY109 for the first session since March 24. The dollar-bloc currencies lead today's move against the greenback, but nearly all the emerging market currencies are participating too. The JP Morgan Emerging Market Currency Index is rising for the third consecutive session. The US threatened sanctions against Russia for cyberwarfare, and election interference has seen the ruble drop 1%. Turkey's rate decision is expected shortly, and the market expects no immediate reversal of the rate hike that cost the former governor of the central bank his job. Equities in the Asia Pacific region were mixed. Hong Kong, China slipped, but Taiwan's 1.25% gain, helped by strong earnings from TSMC, led the regional rally. Stocks are firmer in Europe, and the Dow Jones Stoxx 600 is a new record high.US shares are also trading higher after the S&P and NASDAQ faded yesterday. The US 10-year yield is softer at 1.61% and is now nearly flat over the past month. European bond yields are 1-2 bp lower, leaving the core up 6-7 bp over the past month, while Italy's 10-year yield has climbed 17 bp and Spanish Bono yields are 10 bp higher. Gold is first and continued to knock on $1750.Oil prices are consolidating after yesterday's surge. June WTI is in a roughly 50-cent range on either side of $63.  

Asia Pacific

Australia's employment report was mostly better than expected as 70.7k jobs were filled last month, twice the median forecast from Bloomberg's survey. The unemployment rate slipped to 5.6% from 5.8%, which was also a bit better than expected, especially given the unexpected rise in the participation rate (66.3% vs. 66.1%). However, the disappointment was in the loss of full-time positions (20.8k), which means the job growth was solely a function of part-time positions (91.5k). That said, we must acknowledge that Australia has recouped all the full-time jobs lost last year. The unemployment rate remains above the 5.2% averaged in Q1 20.

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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