CURRENCY MARKET WRAP
As of Sat, Mar 6, Singapore Time zone UTC+8
Dollar Index, +0.08%, $97.39
USDJPY, +0.05%, $111.73
EURUSD, -0.04%, $1.1216
GBPUSD, -0.31%, $1.3037
USDCAD, +0.18%, $1.3384
AUDUSD, -0.08%, $0.7106
NZDUSD, -0.30%, $0.6733
U.S. Treasuries finished little changed, although they did see an uptick from early lows after the jobs report. The 2-yr yield increased one basis point to 2.34%, and the 10-yr yield decreased one basis point to 2.50%. The U.S. Dollar Index increased 0.08% to 97.39.
U.S. Nonfarm payrolls increased by 196,000 in March (consensus 172,000) while nonfarm private sector payrolls increased by 182,000 (consensus 160,000). Avg. hourly earnings rose just 0.1% (consensus +0.3%). The March Employment Situation Report is that it had that Goldilocks hue again of solid job growth and no inflation worries. In brief, this report accomplished three important things: (1) the yr/yr moderation in wage growth will keep the Fed sidelined (2) it exposed February’s weak payrolls data to be an aberration and (3) it helped quiet recession concerns.
As for trade, nothing concrete came out of last week’s high-level talks in Washington, although the tone remained constructive and hopeful about getting an agreement finalized. Trump said it will be known probably in the next four weeks or so if a deal gets done.
This week, May has until April 10, when EU leaders will gather for an emergency summit, to reach some sort of an agreement on a revised Brexit deal with Corbyn. If May accepts Labour demands for a customs union and a deal is passed, the UK would be in a position to leave on May 22 – a day before EU member states elect new members of the European Parliament. But if the two leaders are unable to come to any agreement, a longer extension that could involve the UK taking part in the upcoming election would become likely. However, another extension is not guaranteed as the EU may decide it’s had enough of British lawmakers’ indecisiveness and accept that a crash UK exit may be the only way out from the crisis. Hence, a disorderly Brexit cannot be completely ruled out even after UK MPs moved swiftly this week to pass a legislation that blocks the government from leaving without a deal and requires it to seek further extensions to Article 50 if there is no consensus on the Withdrawal Agreement.
STOCK MARKET WRAP
S&P500, +0.46%, 2,892.74
Nasdaq, +0.51%, 7,578.84
Nikkei Futures, +0.41%, 21,790.0
The S&P 500 gained 0.46% Friday in a broad-based advance that was supported by a Goldilocks Employment Situation Report for March. The benchmark index advanced for the seventh straight session, increased its weekly gain to 2.1%, and closed within ten points of the 2900 level. The S&P 500 energy sector (+1.7%) led the advance as oil prices ($63.10/bbl, +0.86, +1.4%) rose on labor market strength in the U.S. and heightened geopolitical risk in Venezuela and Libya. Conversely, the materials sector (-0.1%) was the lone group that finished lower.
Corporate news was light, although there were some notable analyst recommendations. Dow Inc (DOW 57.24, -2.47) lost 4.1% after JP Morgan initiated the stock with an Underweight rating; Boston Beer (SAM 268.33, -15.67) lost 5.5% after Goldman Sachs downgraded the stock to Sell from Neutral, citing expectations for slowing sales growth; and Intel (INTC 55.60, -0.32) dipped 0.6% after Wells Fargo cut its rating to Market Perform from Outperform.