Archives of “March 2020” month

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It’s non-farm payrolls day but that’s not all

  
  Analysis

Locked and loaded for jobs day

Locked and loaded for jobs day
Stock up on weapons, food and ammunition as the bond market sends frightening signals about coronavirus. Gold is up about 1% and that might be the tip of the iceberg if it gets really bad.
Normally today would be all about non-farm payrolls but as Justin wrote today: This will be arguably one of the least important US jobs report ever.
The consensus is +175K versus +225K last month. We know the US economy was in decent shape before the virus hits, so this just sets a baseline. What will be interesting is the March/April data starting a month from now.
I think the Canadian jobs report is a bit more interesting because Poloz hinted yesterday that he was already leaning towards cutting rates. A soft number could put some pressure on CAD.
Other items on the agenda:
  • Fed’s Evans and Mester 1420 GMT
  • Ivey PMI 1500 GMT
  • Wholesale inventories 1500 GMT
  • Bullard 1620 GMT
  • Williams, Rosengren 1900 GMT
  • George 2030 GMT
All the Fed talk is because the blackout starts tomorrow ahead of the March 18 meeting.

US stock futures fall to session lows as New York rolls in

  
Analysis, US Market
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It’s going to be an interesting one

It's going to be an interesting one
S&P 500 futures are down 94 points following a 106 point decline yesterday. That more-than wipes out there 2% gain so far this week.
It’s a bloodbath in Europe as well with all the main indexes down around 3.5%.
What’s frightening is the drop in bond yields. US 10-year yields are down a whopping 17 basis points to 0.75% after falling to as low as 0.69%. Those numbers are below the T-bill yield of 0.755% and Fed funds. That’s a fresh inversion despite a 50 basis point cut on Tuesday.
With those declines, the dollar’s yield advantage is getting wiped out and as a result it’s falling sharply against the low yielders — JPY, CHF and EUR. I expect to see some additional dollar weakness but we’re fast-approaching the lower bound and the Fed has been steadfast that it won’t go negative. Once we get there, I think the dollar will start to appreciate again on safe haven flows.

US Treasury 10-year yields fall below 0.70%, down by 20 bps on the day

  
Analysis, Forex
  Tags

The yields capitulation continues

USGG10YR
US Treasuries are seeing an unrelenting bid on the day as 10-year yields start to fall below 0.70% now. The movement today is something else with yields falling by over 20 bps on the session. 30-year yields are under 1.30% in a similar move.

This is keeping the pressure on USD/JPY as price now falls further to a low of 105.33.

Nikkei 225 closes lower by 2.72% at 20,749.75

  
Analysis, Global Indices

The Nikkei ends the week at a six-month low

Nikkei 06-03

It has been a choppy week for Japanese stocks but at the end of the day, global central bank stimulus isn’t looking to be enough to lift the mood among Asian investors.

Chinese stocks are once again the ones outperforming the rest of the region, despite also trading lower today. The Shanghai Composite is down by just 0.8% relative to the heavier losses elsewhere – the Hang Seng is even down by 2.3% currently.
The risk mood as we look towards European trading continues to err on the side of risk aversion with US futures also falling by over 1% and Treasury yields continuing to sink to record lows – 10-year yields now at 0.820% and 30-year yields at 1.425%.
As such, this is keeping USD/JPY weaker on the day at 105.85 currently while gold is shining brightly and looks set for its biggest weekly gain since 2016.

Another sharp day down in the major US indices

  
Analysis, PODCAST, US Market
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Yields fall to new lows

The risk off flows continued in the US stock market and debt market.
The Dow industrial average was down over 1000 points at 1 point during the day. The S&P index fell below the 3000 level briefly before rebounding in the last hour of trading.
In the US debt market yields resumed their downward bias after yesterdays modest rebound.
The final numbers for the major indices are showing:
  • S&P index -106.18 points or -3.39% at 3023.94. The low price extended to 2999.83. The high was up at 3083.04
  • NASDAQ index fell -279.49 points or -3.10% at 8738.59. The low price reached 8677.387. The high price extended to 8921.078
  • Dow industrial average fell minus this 969.58 points or -3.58% at 26121.28. The low price extended to 25943.33. The high price reached 26671.92
In the US debt market the 10 year yield fell to a new record low level of 0.898%. It is currently trading at 0.91%. That is still down -14.2 basis points on the day. The yield curve flattening a bit to 32.49 basis points from close to 36 basis points the close yesterday, but all maturity levels fell by over -10 basis points.

US yields tumbled lower

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