Holiday Note: US Jobs Day

Overview: Most financial centers are closed for the holiday today. Those markets that were open in the Asia Pacific region, like Japan, China, and South Korea, advanced. US equity futures are also higher after the S&P 500 reached a new record, and the NASDAQ gapped higher. The cash market is closed today, but the bond market will have a shortened session. On the week, the 10-year benchmark yields in the US and Europe are a little softer but jumped 15 bp and 13 bp in Australia and New Zealand, respectively. The US dollar continues its slightly weaker bias that has emerged over the past few days. For the week, it is mixed. The Norwegian krone's 0.6% gain leads the majors, followed by the New Zealand dollar's 0.4% gain and sterling's 0.35% rise. The Swedish krona (~-0.85%) and Japanese yen (-0.7%) have been the weakest performers. We note that key levels in the euro ($1.17) and against the yen (JPY111.00) were held. Among emerging market currencies, there are two to note. The Turkish lira is up about 1.2% to turn higher for the week. The greenback gave back about 1% this week after surging over 12% in the prior week. The South Korean won rose 0.4% today, which was also sufficient to turn it higher on the week (~0.15%), ostensibly helped by the US chip summit on April 12.JP Morgan's Emerging Market Currency Index has a firmer tone and is poised for the third day of gains. It is up about 0.6% for the week, and it is the third weekly advance of the past four. Gold is marginally extending the nearly $45 rally over the past two sessions. It bottomed near $1678 earlier this week and is now above $1730.The $1750-$1755 area is of technical importance. Crude oil futures are closed but took the unexpected news that OPEC+ will gradually boost output in the coming months as well, and the May WTI contract settled $2.3 higher yesterday to $61.45.This turned it higher for the week, the first advance after a three-week fall.  

US Employment: The US stock market is closed today, and the bond market has an abbreviated session. The release of the monthly jobs report while the stock market is closed has happened about a dozen times since 1980. The lack of participation could inject extra volatility, and especially if the data disappoints. The stimulus and the vaccine rollout are spurring optimism and the estimate for today's non-farm payroll gain appears to be creeping higher. The Bloomberg survey's median forecast is for a gain of 660k in a range of 232k to 1.1 mln. The unemployment rate stood at 6.2% in February and is expected to have fallen to 6.0%, though some see it declining more. Recall that the US lost 1.6 mln jobs in March 2020 as the pandemic struck. The employment data often sets the tone for the other high-frequency economic readings in the month. The PMI and ISM also point to an acceleration of economic activity.  

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Read more by Marc on his site Marc to Market.

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