Monday, February 10, 2020

Dollar advances as NonFarm payrolls in January jumps to 225,000

Tags
  • China
  • Dollar
  • Stocks
  • NonFarm Payrolls
  • US earnings' season

02102020a

Market Recap: Dollar advances as NonFarm payrolls in January jumps to 225,000  

Stocks on Wall Street fell on Friday even as NonFarm payrolls in the US grew more-than-expected. Investors likely reduced their risk ahead of the weekend as uncertainty on the effects of the coronavirus still concern investors.

Uber's shares soared 9.54% on Friday to US$40.63 per share after the ride hailing company revealed its plan to become profitable at the final quarter of 2020.

Indexes Change (%) Net Change Closing Price
Dow Jones -0.94% -277.26 29,102.51
S&P500 -0.54% -18.07 3,327.71
Nasdaq -0.54% -51.64 9,520.51
*Source: Bloomberg

Major indices across the globe recovered over the week despite Friday's drop, erasing most of January's losses. The Nasdaq, KOSPI and Hang Seng each advanced more than 4%, as investors shifted back to risky assets with the expectations that the negative impact of the coronavirus is likely to be short-lived.

Indexes Weekly Change (%) Net Change Closing Price
Dow Jones +3.00% +846.48 29,102.51
S&P500 +3.17% +102.19 3,327.71
Nasdaq +4.04% +369.58 9,520.51
FTSE100 +2.48% +180.69 7,466.70
Euro Stoxx +4.33% +157.58 3,798.49
Nikkei +2.68% +622.80 23,827.98
KOSPI +4.39% +92.94 2,211.95
ASX200 +0.08% +5.36 7,022.58
Hang Seng +4.15% +1,091.64 27,404.27
Straits Times +0.88% +27.75 3,181.48
*Source: Bloomberg

The dollar extended gains on Friday thanks to the better-than-expected employment report for January. US NonFarm payrolls in January increased 225,000 from December's increase of 145,000, besting economists' expectations for a 165,000 increase. Most notable job gains were from the construction, healthcare and transportations and warehousing industries. Construction employment rose by 44,000, likely thanks to the warmer-than-usual weather in January which helped boost employment numbers for the month. Unemployment rate rose slightly to 3.6% while average hourly earnings inched slightly higher by 0.2% MoM and 3.1% YoY.

02102020b

Safe haven assets advanced on Friday thanks to a likely shift to less-risky assets ahead of the weekend as investors mitigate their risk. Gold and yen both advanced on Friday. US Treasuries gained across the board. Benchmark 10-year yields fell 5.9bps to 1.58%.

Safe Haven Assets Change (%) Net Change Closing Price
Gold +0.24% +3.78 1,570.44
Silver -0.68% -0.12 17.65
JPY +0.22% +0.24 109.75
*Source: Bloomberg
US Treasury yields Change (bps) Yield (%)
2-Year -4.4 1.40%
10-Year -5.9 1.58%
30-Year -6.1 2.05%
*Source: Bloomberg

Oil fell on Friday to make its fifth weekly decline as the likelihood for OPEC to make deeper cuts or extend its current limit on oil production reduced. Both Brent and WTI crude oil futures fell on Monday morning (Brent: -1.06%; WTI: -1.05% as of 8.18am GMT +8) as OPEC+ ministers were reportedly unlikely to hold an extraordinary meeting to discuss the impact of the coronavirus on oil markets. A meeting planned for March will go ahead instead of being moved up to the middle or end of February.

Oil Futures Change (%) Net Change Closing Price
Brent Crude -0.84% -0.46 54.47
WTI Crude -1.24% -0.63 50.32
*Source: Bloomberg

Asian markets started Monday's trading session lower as the death toll of the coronavirus outbreak surpasses that of the SARS outbreak. The death toll from the virus reached 910 on Monday morning, with the number of confirmed cases spiking to 40,553 globally. For comparison, the total number of deaths from SARS was 774, while 8,098 people were infected during its outbreak. The Nikkei and KOSPI both started the week lower, opening Monday's session 0.82% and 1.19% lower respectively.

Asia Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index -0.62% -148.90 23,679.08 8:42:15 AM
KOSPI Index -1.31% -28.93 2,183.02 9:02:10 AM
ASX200 Index -0.43% -29.98 6,992.60 9:02:05 AM
Hang Seng Futures -1.06% -289.00 26,985.00 2:59:59 AM
*Source: Bloomberg

Expect earnings reports from the likes of Under Armour, Lyft, SoftBank, Credit Suisse, Airbus, Alibaba, Nvidia and Beyond Meat this week.

Economic releases for the day ahead include (all timings in GMT +8):

  • Switzerland Jan Unemployment Rate (2.45pm)
  • Switzerland Jan Inflation Rate (CPI) (3.30pm)