Investors are looking forward to the U.S.' market opening after the NFP figures for March were released on Friday, showing the most significant increase since last August: 916k.
Some analysts had predicted such a result, but it still was well above the average market predictions. The unemployment rate also fell to 6%, with only the average hourly earnings failing to impress after dropping -0.1%.
Elsewhere in the bonds market.
The U.S. bond yields increased slightly to 1.72%, with the market starting to doubt that the Fed will maintain its decision not to change the monetary policy until after 2023. The markets anticipate the first interest rate hike by the end of next year. On the other hand, the asset purchase program could start as early as the end of this year, according to experts.
Under these circumstances, it could be challenging for the Federal Reserve to maintain its commitment if the employment figures continue at this upbeat pace in the coming months.
In a market that is practically closed these days, the reaction to such a positive employment figure has been minimal.
The U.S. Dollar has strengthened slightly against the euro and the Japanese yen. Against the GBP, it experienced some weakness today due to the strength of the British currency itself. Boris Johnson's announcement that the economy will gradually reopen after a long lockdown period has pushed the pound higher. The rate of administration of vaccines, well above Europe’s, anticipated a return to normality in the United Kingdom and an increased growth prognosis.
This is being reflected primarily in the price of EUR/GBP that accelerated its downward rhythm. Technically, it does not find greater support until the 0.8320 zone, minimum levels reached in February 2020.
The stock markets also had a positive movement last Friday, and the market expects that today they will continue on this upward path. Still, the U.S. treasury bonds need to be analyzed. If the yields on these bonds continue to rise, they could halt the bullish stock market.
The USA30 futures reached a new all-time high near the 33230 area and technically did not show any signs of exhaustion in the RSI oscillators.
Sources: Bloomberg, Reuters.com.
The research provided does not constitute the views of JME Financial Services (Pty)Ltd nor is it an invitation to invest with JME Financial Services (Pty)Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.
As of the date the report is published, the research analyst and his/her spouse and/or relatives who are financially dependent on the research analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities).
The research analyst in not employed by JME Financial Services (Pty)Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation or particular financial needs before making a commitment to invest.
The laws of the Republic of South Africa shall govern any claim relating to or arising from the contents of the information/ research provided.
JME Financial Services (Pty) Ltd trading as ZA.CAPEX.COM acts as intermediary between the investor and Magnasale Trading Ltd, the counterparty to the contract for difference purchased by the Investor via ZA.CAPEX.COM, authorised & regulated by the Cyprus Securities and Exchange Commission with license number 264/15. Magnasale Trading Ltd is the principal to the CFD purchased by investors