Finally a ?Good? U.S. Employment Report?
Today’s Spotlight Market
Although the U.S. employment data showed a modest improvement in February, our neighbors to the north were not so fortunate. Statistics Canada reported that 7,000 jobs were lost in February, vs. a 29,400 gain in January. The job loss took traders by surprise, as the pre-report estimate was for a gain of 15,000 jobs. The unemployment rate held steady at 7.0%. The headline figure may be a bit misleading, as the job losses seemed to be concentrated in part-time employment, which fell by 25,900.? Full-time employment rose by 18,900 in February. The Canadian Dollar took it on the chin after the report was released, with the ?loonie? declining nearly 1 cent vs. the ?greenback?.? ?
Fundamentals
The U.S. economy got a bit of good news on the labor front, as U.S. payrolls rose more than expected last month. The Labor Department reported that U.S. payrolls rose by 175,000 jobs in February, which was slightly above the pre-report estimate of between 150,000 and 160,000 jobs. The unemployment rate ticked up 0.1% to 6.7%, as an increase in the labor force was more than offset by the number of workers still looking for jobs. The monthly revisions were also positive, with January?s payrolls revised higher by 16,000 jobs and December?s payrolls increased by 9,000.
Digging deeper into the report, we note that the construction sector, which can be affected by weather conditions, added 15,000 jobs in February, and the all-important manufacturing sector gained 6,000 jobs last month. Even government payrolls rose last month with a gain of 13,000 jobs, although the Federal Government shed 6,000 jobs. Market reaction was mixed after the employment data was released, with gains seen in the equity indices, Oil, and the U.S. Dollar, with U.S treasuries and Gold among the markets posting declines.??? ?
Technical Notes? -? View Today’s Chart
Looking at the weekly yield chart for 30-year Treasuries, we notice yields seem to have stalled between 3.50% and 4.00% since mid-June of last year. Yields are hovering just above the 200-week moving average (MA), but remain just below the 20-week MA.? The 14-week RSI is neutral, with a current reading of 51.56. Given the mixed economic data seen of late, it appears that bond yields may remain range-bound until a clear trend as to the direction of the U.S. economy appears.???
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