Dollar Sags As Bond Yields Slip

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  1. Dollar Sags As Bond Yields Slip

The dollar sagged on Monday as bond yields extended their decline after a U.S. jobs report showed wage growth lose momentum even as employment increased. The closely watched data released on Friday showed nonfarm payrolls rose by a solid 196,000 in March, topping expectations and giving riskier assets a much-needed lift. That said, this ongoing rally has happened with very little trading volumes, which suggest that stock buy-backs by the companies themselves were very prevalent. By the end of the week 70% of the S&P 500 companies will not be able to buy back their stock before they report their last quarter’s earnings, which are expected to come in lower across all industries.*


  1. Gold Climbs On Weaker Dollar

Gold prices rose to a one-week peak on Monday as the dollar edged lower, while investors awaited minutes of the U.S. Federal Reserve’s March meeting later this week. XAU/USD gained about 0.4 percent in early Monday trading, to last trade at $1,297.05 per ounce as of 7:42 GMT, having hit a session high of $1,296.69 earlier.**


  1. Sterling Recovers Despite Brexit Deadlock

On the Brexit front, the EU has determined PM May’s short-term extension as risky, while May was also not able to get any solution agreed on within her on Parliament. Brexit uncertainty remains the biggest challenge for the UK. However, a weaker dollar has supported the sterling today with GBP/USD trading in the mid-1.3000s, up from recent lows as UK PM May tries to find a compromise with the opposition ahead of the critical EU Summit on Wednesday.***


  1. Important Upcoming Market Events

Brexit is positioned to reclaim center stage later today with a series of indicative votes in the House of Commons. Although no proposal in last week’s votes won a majority, the closest was a motion for a new customs unions. Tuesday will be a very quiet day for data releases with the UK’s March BRC sales data, and March NFIB small business optimism print and February JOLTS report in the US the only releases of note. The Fed’s Clarida speaks in the evening while the IMF’s latest World Economic Outlook update is due. On the earnings front, WH Smith (SMWH) is due to report earnings on April 11th, while JPMorgan (JPM) will release its report on Friday, April 12th.****


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*CNBC, April 8, 2019 2:48 AM ET
*Forbes, April 8, 2019 3:53 AM ET
***Reuters, April 8, 2019 03:07 AM ET
****FXStreet, April 8, 2019 05:30 AM ET

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