Financial Market Fallout from U.S. Jobs Data Surprise Has Been Muted Thus Far

May 10, 2021

Compared to Friday closing levels, the dollar is unchanged against the euro and Swiss franc. The U.S. currency is only 0.4% versus the Australian dollar, 0.3% relative to the Chinese yuan, 0.2% vis-a-vis sterling and 0.2% versus the loonie, Australian dollar, Mexican peso and weighted DXY index. The dollar has firmed 0.1% relative to the Japanese yen.

U.S. stock futures and those so far in Europe are narrowly mixed. Equity markets in the Pacific Rim today closed up 1.6% in South Korea, 1.3% in Australian, 0.6% in Japan and India, and 0.3% in China but down 0.7% in New Zealand and 0.3% in Taiwan.

Ten-year sovereign debt yields have risen two basis points in the U.K. and a basis point in Germany but are flat in the United States and a basis point lower in Japan.

The price of WTI oil is 0.4% but mainly in response to a ransomware attack against a major pipeline. The price of gold has climbed 0.3% and is at a 3-month high.

Today’s data reports have generally upbeat but unremarkable from a market-moving standpoint.

According to the Sentix gauge of investor confidence toward Euroland, perceptions are their best since March 2018. The index printed at a higher-than-anticipated 21 reading after 13.1 in April and -0.2 as recently as February.

The National Australia Bank April readings of business confidence and conditions were at record highs of 26 and 32 compared to scores of 6 and 16 in the final month of 2020.

Australian retail sales rose 1.3% in March, which wasn’t quite enough to prevent the first quarter’s change (-0.5%) from dipping into the red.

Britain’s Halifax house price index posted a 12-month 8.2% rate of increase in April, most in five years. Prime Minister Johnson unveiled new business reopening guidelines.

On-year growth in industrial production accelerated to a 4-month high in Greece of 5.5% in March.

Norwegian CPI inflation dipped 0.1 percentage point to a 3-month low of 3.0%. But PPI inflation there accelerated to a 31-month high of 22.5%, and Danish CPI inflation of 1.5% in April constituted a 42-month high.

Romania’s EUR 2.257 billion trade deficit in March was its widest since September 2008, and Denmark’s DKK 15.19 billion current account surplus that month was at a 4-month low.

In Saudi Arabia, real GDP contracted by a narrow 0.1% last quarter and recorded the seventh consecutive on-year decline, this time of 3.3%.

Turkish unemployment eased marginally to a 2-month low of 13.1% in March.

Indonesian consumer confidence jumped 8.1 index points last month and, at 101.5, finally moved above the threshold between net pessimism and net optimism.

The monthly U.S. employment trends index, a compilation of the Conference Board, will be reported later today.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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