US bond traders took a little bit of a breather yesterday, with the recent relentless sell-off in Treasuries pausing for a day.
All eyes on Friday will likely be on the December nonfarm payrolls report.
Recent economic news out of the US has been largely encouraging, and economists are bracing for another solid, if not spectacular, report this afternoon. Consensus is for a job creation number around the 160k mark.
Focus may be on the monthly wage number, which will likely be of more interest for FOMC officials. Another annual print around the 4% level seems on the cards, with economists expecting a monthly number of +0.3%.
Yet, with the FOMC making clear to markets that it is in no rush to continue cutting rates, we suspect that even a very weak report won’t change things too much for the Fed, and could have a relatively minimal impact on the dollar.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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EUR/USD remains near 1.0400 post-US PCE
The US Dollar’s inconclusive price action allows some recovery in EUR/USD, keeping the pair around the 1.0400 region following the release of PCE inflation data for the month of January.
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Gold slumps to fresh multi-week lows below $2,840
Gold stays under bearish pressure and trades at its lowest level in three weeks below $2,840. The uncertainty surrounding the Trump administration's trade policy and month-end flows seem to be weighing on XAU/USD, which remains on track to snap an eight-week winning streak.
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GBP/USD clings to gains just above 1.2600 after PCE data
GBP/USD remains positively oriented in the 1.2600 neighbourhood as the Greenback is navigating a vacillating range following the PCE inflation release.
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The week ahead – US Payrolls, ECB rate meeting, ITV results – W/c 3rd March
Having seen the Federal Reserve keep rates on hold last month the US labour market continues to show remarkable resilience, despite seeing a slowdown in hiring in January, after a blow out December number.
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Weekly focus – Tariff fears are back on the agenda
While the timing of the EU measures remains still uncertain, Trump surprised markets on Thursday by signalling that the 25% tariffs on Canada and Mexico will be enacted when the one-month delay runs out next Tuesday.
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