The Key Word For Every Market From Gold To Equities To Currencies Is Jobs

Continued dollar weakness and buying in an oversold market sent gold, silver and platinum higher today. Palladium sat out the recovery from yesterday’s surprise drop in precious metals.

The U.S. dollar/euro pair gave the win today to the euro, which was up substantially against the American currency. The greenback will close the first quarter with its worst three months since 2010. This quarter shows the dollar off more than 4.00%.

Additionally, the dollar is the lowest it has been since October of 2015.

The dollar softness against a basket of other leading currencies is being pinned on Fed Chairwoman Janet Yellen’s determination (as of the last few weeks) to keep baseline interest rates steady at 0.25% to 0.50%.

That picnic may be destroyed tomorrow morning (Friday) when the Department of Labor issues March non-farm payrolls and the level of wages in the United States. If there is a sharp uptick in wage inflation or an extraordinary rise in the number of new jobs created, look for revived talk of an interest rate hike.

That would be accompanied by a spike in the dollar against other currencies.

Tellingly today, the dollar rose against the yen but fell against the Swiss franc, indicating that currency action was indeed focused on interest rate speculation rather than on safe haven bids.

 Tomorrow all eyes will be on the monthly employment numbers, but today, jobless claims for the week came in at 276,000, slightly higher than anticipated. Nevertheless, Chicago Fed president William Evans, a non-voting member this year said we are nearing “full employment” and that he is anticipating more rate hikes this year. Once again, the non-voters are prattling on about something quite different from what we hear from most voting members.

The yields on all U.S. bonds fell today: 2-year, 10-year and 30-year. The benchmark 10-year bond fell to the 1.77% range. This was another indicator that safe haven plays were not a factor in the trading day.

Equities across the globe were down or up only very modestly. The NASDAQ falls into that category.

Aside from the sidelining money awaiting tomorrow’s jobs report, we are at the end of a month and end of a quarter, so both winners and losers were being sold out in order to balance sheets… or should we say “spin” those balance sheets?

Let’s see what tomorrow brings.  

Wishing you as always, good trading,