The GBP is the strongest and the CHF is the weakest as traders brace for US jobs report

Major indices are little changed ahead of jobs report

The GBP is the strongest and the CHF is the weakest, but all pairs are relatively scrunched together as traders await the US and Canada jobs reports.

Recall from last month, the nonfarm payroll total came in at 210K, much weaker than expectations. This month the estimates are in the 425K range. However, the ADP estimate for jobs gain of 807K on Wednesday, will likely have traders thinking “higher” despite the sketchy correlation that can exist between the ADP and the BLS report. Last month ADP revised their jobs to 505K from 405K (BLS has the figure at 210 K). In Canada job gains are expected at 24.5 K after an oversized 153.7 K rise last month. Data will be released at 8:30 AM ET.

US stock futures are implying a modestly higher opening for the major indices after relatively modest declines yesterday.

In the US debt market yields are little changed/little lower

in Europe, the headline CPI flash estimate came in stronger than expected at 5% (core inflation came in at 2.6%), and retail sales were also a stronger than expected 1% versus -0.4% estimate. The German government bond reached -0.31% yesterday which was the highest since May 2019. Today the benchmark 10 year yields are modestly changed despite the better data, but will the ECB soon need to change their stance and look to raise rates sooner rather than later?

Oil reached back above the $80 level as demand and supply concerns push the price higher.

A snapshot of the market currently shows:

  • Spot gold is down $0.31 or -0.01% at $1790.45.
  • Spot silver is down four cents or -0.17% at $22.13
  • WTI crude oil futures are trading up $0.63 at $80.09
  • The price of bitcoin is lower at $42,411. The low price today reached $40,938.98. That took the price to the lowest level since September 29. An energy shut down in Kazakhstan is being blamed for the decline as the country is a big miner of bitcoin.

In the premarket for US stocks, the futures are implying a modestly higher opening

  • Dow industrial average is up 9.53 points after yesterday’s -170.64 point decline:
  • S&P index is up 5.9 points after yesterday’s -4.55 point decline
  • NASDAQ futures are implying a 34 point rise after yesterday’s -19.31 point decline

In the European equity markets, the major indices are mostly lower:

  • German DAX, -0.5%
  • France’s CAC -0.25%
  • UK’s FTSE 100 unchanged
  • Spain’s Ibex -0.7%
  • Italy’s FTSE MIB +0.1%

In the US debt market, the major indices are down marginally and taking a breather after the run up this week so the #10 year yield move up to test the 2021 high at 1.774%. The high yield reached 1.754% yesterday:

US yields

US yields are modestly lower ahead of the jobs report

In the European debt market, the benchmark 10 year yields are mostly higher. The German 10 yield moves closer to the parity level (currently at -0.064%).. The yield is not traded above 0.0% since May 7, 2019.

European yields

European benchmark 10 year yields

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