Financial markets wobble ahead of US jobs
Financial markets continued to wobble overnight as the impact of Fitch’s downgrade of US debt and worries ahead of tonight’s all-important US jobs report weighed on markets.
The US’s S&P 500 fell 0.3% while the tech-focused Nasdaq dropped 0.1% after heavier losses earlier in the week.
The more significant action was seen in bond markets with the US ten-year bond yield climbing to 4.18% — the highest level since November last year.
Greenback eases, BoE lifts
In FX, higher US bond yields have mostly supported the US dollar, although the greenback did ease ahead of tonight’s job report.
The AUD/USD gained 0.2% while the NZD/USD was flat.
The USD/CNY also eased but remains near recent highs at 7.20.
In Europe, the GBP/USD led the action, with the pair flat in a volatile session after the Bank of England raised rates by 25 basis points to 5.25%.
The USD/JPY fell, with the Japanese higher in most markets, as the Bank of Japan continued to intervene in bond markets to push yields lower following last week’s “tweak” to policy.
RBA statement in focus
Today’s early trade will be looking AT the Reserve Bank’s Statement on Monetary Policy due at 11.30am AEST.
Of course, tonight’s major event is the US non-farm employment number, due at 10.30pm.
The US labour market remains strong – employment has grown steadily for two-and-a-half years – and markets are looking for another 200k to be added tonight. The unemployment rate is forecast to stay steady at 3.6%.
With the US dollar recently stronger, and bond yields higher, another solid number could drive further USD strength.
USD eases ahead of jobs report
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Calendar: 31 July – 4 August
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
