Market Update 5Mar2021

Weekly Market Update 5 Mar 2021 – USD Hits New Highs On Strong Payrolls Report; Senate Passes $1.9tn Stimulus Package

Weekly Market Update 5 Mar 2021 – USD Hits New Highs On Strong Payrolls Report; Senate Passes $1.9tn Stimulus Package

1. The USD hit new highs on Friday after a strong jobs report, extending its gains against all major currencies. The non-farm payrolls figures came in more than double the forecasted level, reflecting the economy’s strength and recovery in employment, as vaccination distribution accelerates nationwide. Stock markets recovered and treasury yields rose following the report. The US senate also passed the $1.9 trillion Covid relief stimulus bill, which will provide payroll support, jobless benefits, and further funding for vaccine distribution and testing, further brightening the outlook on the US economy.

2. The CAD was the next best performing currency on Friday, after posting a surprise trade surplus in January, outperforming expectations for a deficit. Commodity exports remain on a strong footing and volumes have risen, returning to pre-pandemic levels. The February PMI also showed economic expansion at its fastest pace since last August. 

3. Retail sales in the Eurozone came in significantly weaker than expected, sending the EUR down more than 1.3% on the week. This is exacerbated by the pandemic situation which does not seem to be improving, with infections accelerating in the EU last week, and vaccine rollouts continuing to lag behind that of major global peers. 

Salzworth Asset Management