Americas Roundup: Dollar flat after U.S. jobs data, Wall Street climbs, Gold bounces off lows,Oil prices rise nearly $2 amid broad market optimism-March 10th, 2018

Market Roundup

• World leaders welcome planned talks between Trump and N. Korea leader.

• Trump may exempt more countries from tariffs – Treasury's Mnuchin.

• Fed's Evans urges waiting a 'bit longer' on rate hikes.

• Fed's Rosengren hints in four-hike camp after U.S. fiscal boost.

• U.S. Feb Non-Farm Payrolls, 313k, 200k forecast, 200k previous, 239k revised.

• U.S. Feb Private Payrolls, 287k, 191k forecast, 196k previous, 238k revised.

• U.S. Feb Manufacturing Payrolls, 31k, 15k forecast, 15k previous, 25k revised.

• U.S. Feb Unemployment Rate, 4.1%, 4.0% forecast, 4.1% previous.

• U.S. Feb Average Earnings YY, 2.6%, 2.8% forecast, 2.9% previous, 2.8% revised.

• U.S. Feb Average Workweek Hrs, 34.5, 34.4 forecast, 34.3 previous, 34.4 revised.

• U.S. Jan Wholesale Invt (y) R MM, 0.8%, 0.7% forecast, 0.7% previous.

• U.S. Jan Wholesale Sales MM, -1.1%, 0.7% forecast, 1.2% previous, 0.8% revised.

• U.S. ECRI Weekly Index w/e, 149.3, 150.3.

• CA Q4 Capacity Utilization, 86.0%, 85.2% forecast, 85.0% previous, 85.1% revised.

• CA Feb Unemployment Rate, 5.8%, 5.9% forecast, 5.9% previous.

• BOJ chief brushes aside early stimulus exit, calls for free trade.

• Weak German data blamed on seasonal factors but U.S. tariffs could bite.

• UK's Hammond plans low-key budget update as Brexit nears.

• ECB staff eyes rate rise in mid-2019, but the road looks bumpy, sources say.

Looking Ahead – Economic Data (GMT)

• 11 Mar 23:50 Japan Q1 Business Survey Index, 9.7% previous.

• 12 Mar 02:00 China Feb FDI (YTD), 0.30% previous.

Looking Ahead – Events, Other Releases (GMT)

• 12 Mar Eurogroup meeting – Brussels

Currency Summaries

EUR/USD is likely to find support at 1.2233 levels and currently trading at 1.2307 levels. The pair has made session high at 1.2332 and hit lows at 1.2272 levels. The euro was little changed against US dollar on Friday after payrolls data showed strong job additions in February, but a slowdown in wage growth pointed to a gradual rise in inflation, tempering expectations of faster interest rate increases. Nonfarm payrolls jumped by 313,000 jobs last month, boosted by the largest gain in construction jobs since 2007, recording its biggest increase in more than 1-1/2 year, the Labor Department said. Average hourly earnings edged up four cents, or 0.1 percent, to $26.75 in February, a slowdown from the 0.3 percent rise in January. That lowered the year-on-year increase in average hourly earnings to 2.6 percent from 2.8 percent in January. Strong jobs data last month fueled speculation that higher wages could lead to faster interest rate increases by the Federal Reserve and make borrowing expensive, rattling global equities market. However, the slow wage growth in February could temper expectations that the Fed will change its rate forecast to four hikes this year from three. The index that tracks the dollar against six major currencies fell 0.038 point or 0.04 percent, to 90.141.The euro was down 0.03 percent, at $1.2306.

GBP/USD is supported in the range of 1.3777 levels and currently trading at 1.3846 levels. It reached session high at 1.3887 and dropped to session low at 1.3800 levels. Sterling rose against the dollar on Friday after a slowdown in U.S. wage growth weakened the dollar and British industrial production data showed the UK's manufacturing sector continues to expand, albeit slowly. Traders had earlier pushed the pound slightly lower as markets wait to get more clarity on Britain's Brexit negotiations with the European Union. But when the dollar fell as data showed that despite the strongest U.S. jobs growth in 1-1/2 years, wage growth had fallen, the pound pushed higher. The pound gained 0.4 percent to $1.3874. Sterling also rose against the euro and was up 0.3 percent at 88.85 pence per euro. British Finance Minister Philip Hammond on Tuesday gives his half-yearly update on the economy, known as the spring statement. Analysts said with predictions of a Bank of England interest rate hike for May baked into the price, and ongoing political risks around Brexit negotiations, assessments of the health of the UK economy have taken a backseat for currency investors. Britain has said it will announce a transition deal which will buy Britain and the EU time to decide their future relationship – later this month at an EU leaders summit. But many investors remain sceptical that this can happen so soon. That uncertainty has weighed on sterling after the currency rallied at the start of the year.

USD/CAD is supported at 1.2774 levels and is trading at 1.2814 levels. It has made session high at 1.2893 and lows at 1.2812 levels. The Canadian dollar strengthened to a more than one-week high against its U.S. counterpart on Friday, adding to gains after Canada was exempted the day before from U.S. metals tariffs, as domestic data showed that employment rose in March. The Canadian economy added 15,400 jobs in February after a big loss in January, but full-time positions shrank and wage growth decelerated, prompting analysts to predict the Bank of Canada will be in no rush to raise interest rates. In separate domestic data, capacity utilization rose to 86.0 percent in the fourth quarter, above predictions for a rate of 85.2 percent and the highest since the second quarter of 2007. Chances of a rate hike by the central bank at the next meeting in April were little changed at one-in-three, while money markets continued to see two hikes by year-end, data from the overnight index swaps market showed. The Bank of Canada, which has hiked three times since July, left its benchmark rate unchanged at 1.25 percent on Wednesday as it worried about an uncertain trade outlook. On Thursday, Bank of Canada Deputy Governor Tim Lane said it was too soon to call the “all clear” on tariffs. The Canadian dollar was trading 0.3 percent higher at C$1.2851 to the greenback, or 77.81 U.S. cents. The currency touched its strongest since March 1 at C$1.2820.

AUD/USD is supported around 0.7772 levels and currently trading at 0.7847 levels. It hit session high at 0.7854 and made session lows at 0.7842 levels. The Australian dollar rose against its U.S. counterpart on Friday as greenback came under pressure after U.S. jobs data pointed to slower wage growth, which could temper expectations that the Federal Reserve will raise its forecast for how many times it hikes interest rates this year. U.S. jobs growth posted its biggest increase in February in more than 1-1/2 years. Although the data increased the likelihood of interest rate rises, slower wage gains pointed to only a gradual increase in inflation. Slow wage growth, could temper expectations that the Fed will raise its rate forecast to four hikes this year from three. There is optimism that tightening labor market conditions will spur faster wage growth and pull inflation toward the Fed's 2 percent target. The Australian dollar also got boost after North Korean leader Kim Jong Un offered to stop nuclear and missile testing and to meet with his U.S. counterpart. Kim has committed to “denuclearization” and to suspending nuclear or missile tests and extended an invitation to hold the first-ever U.S.-North Korea summit, marking a potentially dramatic breakthrough in the North Korea nuclear standoff. The antipodean countries are open economies exposed to global growth and commodity prices, and their currencies tend to rally when risk appetite improves. The Aussie was last trading at $0.7846 and was up for the week.

Equities Recap

A strong jobs report out of the U.S. boosted European shares on Friday after a sluggish start to trading, while U.S. tariffs on steel and aluminium hit steelmakers.

UK's benchmark FTSE 100 closed up 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.32 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day up by 0.3 percent.

To celebrate the bull market's ninth birthday on Friday, the three major U.S. stock indexes rose more than 1 percent, with the Nasdaq touching a record high, as February's jobs report assuaged fears of inflation and aggressive interest rate hike.

Dow Jones closed up by 1.76 percent, S&P 500 ended up by 1.72 percent, Nasdaq finished the day up by 1.76 percent.

Treasuries Recap

U.S. Treasury yields advanced on Friday after data showed the world's largest economy created far more jobs than expected in February, reinforcing expectations the Federal Reserve would raise interest rates at least three times this year.

In late trading, U.S. benchmark 10-year yields were up at 2.897 percent after earlier hitting session highs, from Thursday's 2.866 percent.

U.S. 30-year yields also touched the day's peak and last traded at 3.164 percent, compared with 3.132 percent late on Thursday.

U.S. two-year yields matched a nine-year peak of 2.286 percent hit Feb. 28 and were last at 2.702 percent, from Thursday's 2.254 percent.

Commodities Recap

Gold prices bounced off their lows on Friday after the U.S. dollar slipped against most of its peers as slowing wage gains foreshadowed a gradual inflation increase this year.

Spot gold was unchanged on the day at $1,321.99 by 1:46 p.m. EST (1846 GMT) and on track to end the week unchanged. U.S. gold futures for April delivery settled up $2.30, or 0.2 percent, at $1,324 per ounce.

Oil prices rose nearly $2 on Friday, rebounding from two days of declines as Wall Street climbed on strong U.S. jobs data, while investors also grew hopeful that a planned meeting between U.S. President Donald Trump and North Korea's Kim Jong Un could ease geopolitical tensions.

Brent crude futures rose $1.88 to settle at $65.49 a barrel, a 2.96 percent gain. Brent traded between $63.69 and $65.63 during the session.

West Texas Intermediate (WTI) crude futures rose $1.92 to settle at $62.04 a barrel, a 3.19 percent gain. U.S. crude traded between $60.14 and $62.14.

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