- US Financial system in crisis?
- UK grows by 0.3% in January
- All eyes on US jobs data
* Daily move - against G10 rates at 5:00pm, 09.03.23
** Indicative rates - interbank rates at 5:00pm, 09.03.23
After a week where we have seen a lot of USD buying, it was no surprise to see some profit-taking after weekly jobless claims climbed to the highest since December. Markets are expecting an additional 225,000 jobs added in February following that monster print of 517,000 in January, and wages set to rise to December’s level. We saw data this week already suggest that the job market remains tight, and should we see higher than expected figures today, then we could well see a breach of the week's earlier losses on GBPUSD and EURUSD.
January’s PMI figures came in higher than expected for the UK, so it may not come to much of a surprise to see economic growth for the UK up at 0.3% in January, versus an expected figure of 0.1%. The data suggests that the UK could well avoid a recession in the first half of the year. GBP is up marginally this morning, but any move higher seems limited given the size of the UK’s financial sector and any exposure to the US banking stress.
The US jobs data will be the highlight of the day and whether the data continues to support the idea that the Fed will need to keep hiking rates further.
We saw yields on 2-year treasuries rise over the course of February, following that 517,000 nonfarm payroll print which caused USD to gain across the month. Another set of strong job numbers and we could see this trend continue
Source: Bloomberg Finance L.P.
Have a great day.