08 Jan

Treasury yields continue to grow steadily following commodity prices and positive US data

January 8, 2021

by JustForex

10-year bonds yield continues to rise and surpassed the 1.10% mark yesterday. Investors are positive about the expansion of stimulus measures for the economy after the Congressional elections. The Democratic victory is expected to increase welfare benefits from $600 to $2,000.

The dollar index rose following the bonds. Positive statistics this week cheered the bulls. According to ISM, the manufacturing sector showed positive dynamics at first. Now the service sector has distinguished itself with high indicators. According to the Institute for Supply Management, the service index rose over the month to 57.2 from 55.9 in November. The December marker exceeded all economists’ forecasts. Values above 50 indicate expansion.

The acceleration in the growth of companies that contribute to the economy the most is surprising considering the rise in coronavirus infections and tightening restrictions for businesses in some states.

In December, fourteen service sectors showed growth, primarily due to management companies and support services, wholesale and retail sellers, and medical services. There was a contraction in the hotel and catering sectors. Negative indicators are also observed in the field of entertainment and leisure.

Index of employment was the only weak link in the report. There was a contraction for the first time in four months. The index fell to 48.2. Shortly before the release of data on the US labor market, this is the only negative moment for the market confirming weak expectations. In the American session, one can probably expect high volatility in the stock, credit, and foreign exchange markets.

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Currently, the stock market and the dollar index are demonstrating positive dynamics:

S&P 500 (F) 3,808.88 +13.38 (+0.35%)

Dow Jones 31,041.13 +211.73 (+0.69%)

DAX 14,122.95 +154.71 (+1.11%)

FTSE 100 6,873.35 +16.39 (+0.24%)

USD Index 90.037 +0.246 (+0.27%)

Important events:
  • – Nonfarm Payrolls Сhange (Dec) at 16:30 (GMT+2);
  • – Average Hourly Earnings (m/m) (Dec) at 16:30 (GMT+2);
  • – Unemployment rate (Dec) at 16:30 (GMT+2).

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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