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Market Wire - Non-Farm Payrolls Smash Estimates, Dollar Climbs

CalendarMarch 4, 2022
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Karl Schamotta - Chief Market Strategist, karl.schamotta@corpay.com

678,000 jobs were created in the United States last month even as coronavirus infection rates fell and businesses returned to full operations. According to data released by the Bureau of Labor Statistics this morning, the unemployment rate slid to 3.8 percent from 4 percent in January, while the participation rate held at 62.3 percent. Average hourly earnings were little changed.

The data was collected in mid-February, before the Russian invasion of Ukraine raised energy prices, tightened global financial conditions, and dampened economic sentiment levels.

Investors were positioned for a 440,000-job gain, but market reaction was muted. Treasury yields remained stable, with the ten-year yield holding near 1.78 percent in the moments after the release. The trade-weighted dollar strengthened slightly, and remains sharply higher on the week.

The euro is trading below the 1.10 mark for the first time since early 2020 as higher energy prices and slumping rate differentials take their toll, and implied currency market volatility is rising as funding stresses ratchet up. Although still unlikely, a move down to parity with the US dollar is suddenly under consideration on dealing floors.

A pitched battle around Europe’s largest nuclear plant sent traders scurrying for cover last night, but radiation levels reportedly remained normal, and Russian troops have now occupied the facility. Safe haven currencies look likely to remain in demand through the remainder of the session as fighting escalates and weekend risk events become more probable.

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