Let’s start with the CBOE volatility index which saw a slight uptick on Friday, up on either side of 13.0, certainly reflecting the reactions towards the slew of feeds. After geopolitical concerns heightened with the strike on Syria, the US March non-farm payrolls (NFP) number brought in another surprise. At 98k, US payroll gain had been the weakest since May 2016, creating a dent in equity markets. The reaction however did not last long with the market pinpointing the set of numbers on weather elements.
Additionally, the unemployment rate had also turned out lower-than-expected, keeping sentiment buoyant. US markets eventually closed near neutral, with earnings releases this week likely to deal a greater impact on markets, especially against the backdrop of consolidating prices.
For the US dollar, the movements had been an intriguing one. Initial reactions towards the payrolls data saw an unloading of the US dollar, with the USD index sinking to the day’s low at 100.52. Similar to the movements within equity markets, the dip had been brief for the USD. It was helped further by New York Federal Reserve President William Dudley’s comments on monetary policy post-NFP.
Despite the disappointing data, the Fed President went on the hawkish end, clarifying his earlier comments on the ‘little pause’ on short-term rate normalization. A presumably shorter than expected pause emphasized by the Fed President had certainly given the market reasons to bid up the USD. Hence, despite the disruption of geopolitical concerns and weak payroll numbers, the currency market appear to be sticking close to the broad themes of growth and monetary policy tightening. Moving forward, with a lack of tier-1 data in the day, today’s appearance by Federal Reserve chair Janet Yellen would likely be the key influence for currency market action.
For Asian markets, the relatively peaceful conclusion of the meeting between US President Donald Trump and China President Xi Jinping had probably been the best scenario for Asian market bulls. The meeting certainly did not appear ‘very difficult’ as with what President Trump had pre-empted for markets. Early movers have seen mixed result thus far, while Hong Kong and Singapore markets are expected to come online with mild gains. Look ahead to Taiwan March trade numbers while China’s loan conditions upload may be due any time between 10-15 April.
Friday: S&P 500 -0.08%; DJIA -0.03%; DAX -0.05%; FTSE +0.63%