Forex Today: Markets cheerful, dollar pressured Nonfarm Payrolls, Good Friday edition
|Here is what you need to know on Friday, April 2:
Markets have kicked off Q2 with an upswing after President Biden's infrastructure plan, hopes for a vaccine-led recovery, and upbeat US data. While many parts of the world are off, US Nonfarm Payrolls stand out on Good Friday, with elevated expectations.
The S&P 500 Index closed the first day of the second quarter above 4,000, raising the profile of stocks worldwide. The upbeat mood weighed on the safe-haven dollar. Investors are still digesting President Joe Biden's proposed $2.25 infrastructure scheme, which will be funded by tax hikes.
Republicans have already expressed their opposition to higher rates on corporates and Congress will likely modify the program. Ten-year Treasury yields have dropped below 1.70% as prospects of massive debt issuance subside. Gold has been able to take advantage of this and recover.
Around 30% of Americans have received at least one vaccine shot, and the world's largest economy is on course to immunizing all adults early in the summer. The pace of jabbing has also picked up in Europe, but COVID-19 infections are on the rise. France, Italy and Germany are under severe restrictions around Easter.
The US ISM Manufacturing Purchasing Managers' Index smashed estimates with 64.7 points in March, the highest since 1983. This forward-looking gauge has raised expectations for Friday's Nonfarm Payrolls report, which is set to be the first of many upbeat publications.
The economic calendar is pointing to an increase of over 600,000 positions, but some analysts have also touted one million jobs gained. On the other hand, Thursday's jobless claims statistics disappointed by jumping back above 700,000.
- US Nonfarm Payrolls March Preview: Optimism and evidence this time?
- Nonfarm Payrolls Preview: Five reasons why hiring is set to skyrocket, dollar may follow
The mix of low liquidity and high expectations could prove explosive for currencies, where trading remains active despite the holiday.
WTI Crude Oil is trading above $61 after OPEC+ countries decided to extend production cuts for another month and despite Saudi Arabia's announcement that it would taper down its voluntary output curbs in the next few months. Hopes for a strong global recovery have outweighed concerns about oversupply.
Bitcoin has stabilized below $60,000 as more institutional interest pours into the granddaddy of cryptocurrencies. Ethereum is flirting with the round 2,000 level.
More Armageddon has been postponed: Cryptocurrencies and market realities
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.