Markets shake off dismal jobs data and move to risk-on mode

Despite three days of abysmal jobs data, markets remain in risk-on mode for a second day with the Nasdaq erasing YTD losses and the S&P nearing the same. Optimism surrounding a further rate cut from the Fed and upbeat news of trade negotiations with China has investors flocking to equities - and turning the dollar negative versus its peers.

“The people heard it, and approved the doctrine, and immediately practiced the contrary.”

Benjamin Franklin, The Way to Wealth
  • FX Rates
    May 8, 2020

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD
    The dollar is broadly lower amid markets' risk-on appetite following positive news with US/China trade talks and dovish rhetoric from the Federal Reserve. Fed officials are considering another rate cut, a cut that would move rates below zero. The April jobs report came in dismal as expected, showing 20.5 million jobs lost in April (versus 22 million expected), sending the jobless rate to 14.7% - the highest level since the Great Depression. The jobless rate in February was 3.5% - the lowest in 50 years.
    GBP
    UK markets were closed for Victory Day and the country awaits PM Boris Johnson's comments on Sunday, when he will lay out the next steps in the UK’s response to the virus. The pound gained slightly on short covers in early trading, but erased gains following the US jobs report.
    EUR

    The euro rose slightly versus the dollar, but is still down over 1% on the week.

    CAD

    The Canadian dollar gained versus the USD ahead of the jobs report data boosted by US dollar weakness and an uptick in oil prices. The Canadian jobs report showed 2 million jobs lost in April, which was less than expected. The loonie continued to rise after the release.

    ASIA/PACIFIC

    American and Chinese trade negotiators agreed to create “governmental infrastructures necessary to make the phase-one trade deal 'a success'." According to a US trade official, "In spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner." Equities rose on the news that Nasdaq was now positive for the year. The yuan is stronger for a third day.

     

     

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Kathryn Garvey
WRITTEN BY
Kathryn Garvey

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