Markets:
- Gold up $28 to $4503
- Silver up 3.8%
- WTI crude up $1.20 to $58.97
- US 10-year yields flat at 4.17%
- S&P 500 up 0.8% to fresh record
- USD leads, JPY lags
It was a lively news day but not as much as it could have been. The Supreme Court released a decision on Friday as expected but it wasn’t about tariffs, so we will continue to wait for that. The next possible date is Wednesday, which has also been scheduled as a ‘decision day’.
In terms of what happened, the non-farm payrolls report led to volatile trading. The dollar rose on the kneejerk, then fell around 25 pips due to the softer headline and revisions, then started a long climb as the market focused on the lower unemployment rate. That view was validated by Barkin, who said he welcomed falling unemployment.
Overall, the US dollar moves weren’t big.
The loonie didn’t get any help from a strong jobs report as USD/CAD rose for the six straight day to start the year. That pair is now at a five week high, even as oil prices rise. Part of the reason is compressing Canadian heavy oil spreads after the US-Venezuela coup.
The big loser on the day was the yen and most of that came before the election reports but I think that’s a critical spot to watch. If Takaichi launches a campaign and promises even more spending, that could turbocharge worries about Japanese indebtedness and further boost long-term borrowing costs. She’s polling well so it shouldn’t be a surprise if she decides to pull the trigger.
A bid for precious metals came midway through US trading and I wonder if the market is sensing weekend risk after the drama in Venezuela. It seems as though Cuba is on the clock and maybe Greenland too. Further, keep an eye on Iran this weekend as protests there likely lifted gold and oil prices in Friday.
Have a great weekend.
