Marketwatch North America

Daily Insights
February 2, 2024

U.S. Nonfarm Payrolls for January were +353k, almost double the +185k estimate and the highest level in over a year. December’s NFP were revised higher to 333k, an added 117k from the initial +216k reported. January’s Unemployment Rate was unchanged vs. December at 3.7%, but below the 3.8% estimate.

Today’s Nonfarm payrolls marks the 3rd consecutive monthly gain since October’s drop to 150k (which now looks like a head fake in hindsight) and upends market expectations of any near-term Fed rate cuts. U.S. Treasury yields are sharply lower following the payrolls data and remain in flux as traders assess the rates landscape. It goes without saying that yields are lower in all tenors, the most damage in the mid-curve tenors with 1yr to 5y tenors -0.16% (16 basis points is a massive intraday move).

The dollar has followed yields higher with the U.S. Dollar Index now +0.68% and trading to as high as 103.86, its highest level since December 13th. Dollar gains have paused at 103.75, but momentum and a technical ‘outside day’ pattern formation (lower low and higher high in the same day) warrants expectation for additional dollar gains.

The dollar’s reaction to payrolls was swift and decisive as seen in the EUR/USD which gapped 40 pips lower. Current dollar gains vs. the G10/majors: +1.72% vs. NOK, +1.07% vs. SEK, +0.96% vs. NZD, +0.94% vs. JPY, +0.75% vs. CHF and AUD, +0.71% vs. GBP, EUR, and DKK, +0.54% vs. CAD, and +0.27% vs. MXN.

The probability of a May Fed cut has dropped to 67%, down from 96% yesterday.

Gold is -1.08%, silver is -2.64%, and oil prices are -2.18% to trade at $72.17/barrel.

Economic Calendar

USD - Average Hourly Earnings m/m
AUD - PPI q/q
USD - Non-Farm Employment Change
USD - Unemployment Rate
EUR - French Gov Budget Balance
EUR - French Industrial Production m/m
USD - Revised UoM Consumer Sentiment
EUR - Spanish Unemployment Change
USD - Factory Orders m/m
GBP - MPC Member Pill Speaks
USD - Revised UoM Inflation Expectations

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 148.055 146.242
eur/usd 1.08974 1.07916
gbp/usd 1.27723 1.26565
aud/usd 0.661 0.65319
usd/cad 1.3446 1.33656
eur/gbp 0.85389 0.85204
usd/mxn 17.1618 17.0369
Equities and Commodities
S&P 500 4911.23
NASDAQ 17422.2
DOW 38389.3
GOLD 2031.58
SILVER 22.58

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.