Dollar And Bond Yields Rally Following Employment Report
Today’s Spotlight Market
Our neighbors to the north also produced better than anticipated jobs figures in May, with Statistics Canada reporting payrolls rose by 58,900 last month, vs. a decline of 19,700 jobs in April. More importantly, more than half of the new jobs created were full time jobs, with nearly all of them in the private sector. Year over year, the Canadian economy created a net 192,300 jobs, despite sharply lower oil and natural gas prices that have hurt employment in the all-important energy sector.?? ?
Fundamentals
The employment picture in the U.S. continued to improve, but at a sluggish pace, according to the most recent jobs data. On Friday, the Labor department reported that 280,000 jobs were created in May, up from the revised 221,000 jobs created in April. This was better than the 225,000 jobs increase forecasted by analysts. Professional and business services sectors posted the largest employment increase with 63,000 jobs created, followed closely by the leisure and hospitality sectors which added 57,000 jobs last month. Wages were also a bright spot, with average hourly earnings rising by 0.3% to $24.96. Wage growth is up 2.3% year over year so far. As has occurred frequently in the past, not all of the data in the employment report was positive. The unemployment rate ticked up by 0.1% to 5.5%, the average workweek remained steady at 34.5 hours, and the labor participation rate remains near historical lows at 62.9%. The U.S. Dollar was the biggest beneficiary of the better than expected employment data, rising to 12-year highs vs. the Japanese Yen. U.S. yields moved sharply higher, with the 10-year note reaching its highest yield since October of last year. ?
Technical Notes? -? View Today’s Chart
Today we will take a look at the weekly continuation chart for Japanese Yen futures. If we start at the major low made back in 1985, the Yen has staged an impressive rally vs. the U.S. Dollar. However, we can see that the uptrend line drawn from this major low has failed, which appears to be signaling the end of the historic bull market. There is little in the way of longer-term support until the 0.7400 price level, and below that at 0.6850. Resistance is found near 0.8900.
———————————————————————————————————-
This article is provided for informational purposes only. No statement in this article should be construed as a recommendation to buy or sell a security or to provide investment advice. The content provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy and completeness. optionsXpress makes every effort to provide timely information to its recipients but cannot guarantee specific delivery times due to factors beyond our control. Derivatives involve substantial risk and are not appropriate for all investors. Please read the?“Disclosure Statement for Futures and Options”?prior to investing in futures or options. For investments using a straddle or strangle options strategy the potential loss is unlimited. Multi-leg option strategies are subject to multiple commissions. Profits may be eroded by the commission expended to open and close the positions and?other risks?apply.