Market Wire - Jobless Claims Tick Lower, But Commodity Moves Dominate Markets
Karl Schamotta - Chief Market Strategist, firstname.lastname@example.org
The number of Americans filing new claims for unemployment benefits dropped to 215,000 last week, 18,000 less than in the prior week. Data released by the Department of Labor this morning showed the 4-week moving average – used to smooth out weekly volatility and discern longer-term trends – falling to 230,500, a decrease of 6,000 from the previous week's revised average.
The United States is expected to add 420,000 jobs when February non-farm payrolls are reported tomorrow, but moves in commodity prices are dominating market focus. Brent crude is trading above $x a barrel, and West Texas Intermediate is near $x as traders “self-sanction”, avoiding the legal, reputational, and settlement risks associated with purchasing Russian cargoes. Wheat prices are up almost 40 percent this month, zinc is trading at its highest levels since 2007, and Asian coal has hit record territory, with a number of raw materials indices seeing the biggest moves since the seventies.
Currency traders are positioning for complex dynamics surrounding the European Central Bank, Federal Reserve, and Bank of England meetings scheduled over the next two weeks - central bankers face difficult choices in communicating a commitment to fighting inflation while also recognizing the downside risks associated with extreme levels of geopolitical turmoil, and unpredictable exchange rate moves could unfold as policy approaches evolve.
With the US most economically and geographically insulated, real yield differentials are tilting in the dollar's favour, and the greenback is rising against all rivals.