Risk Assets Rise Ahead of Nonfarm Payrolls

 

Momentum In Stocks     

Major US stock indices posted their second consecutive day of gains with the threat of a trade war between the US and China continuing to ease as officials from both sides expressed optimism for a negotiated solution.  The DJIA led the way with a 0.99% gain, while the S&P 500 and Nasdaq posted more modest gains of 0.69% and 0.49%, respectively.  US Treasurys sold off throughout the trading session, as yields/swap rates increased 1-4bps across the curve for the second time in as many days, bringing the 10-year note yield above 2.83%.  In commodities, crude oil futures fluctuated between gains and losses after a report from data provider Genscape Inc., which displayed inventories at the United States’ major pipeline hub in Cushing, Oklahoma steadily rising, offset most of the positive sentiment received from an unexpected increase in Saudi oil prices.  Overall, WTI crude finished 0.25% higher on the day to $63.55/barrel.

 

 

Claims Rise Ahead of Payrolls   

A relatively light day of key economic data releases did include a report from the Labor Department, which showed initial jobless claims in the US rising from the near 45-year low recorded last week.  The number of new claims for the week ended March 31st climbed 24,000 to a seasonally adjusted 231,000 (225,000 expected), and the four-week moving average of claims increased by 3,000 to 228,250.  Also detailed in the report, the number of continuing claims decreased by 64,000 to 1.808 million for the week ended March 24th.  Tomorrow the Labor Department will release its more comprehensive monthly employment report, where median forecasts point to a 185,000 nonfarm payroll addition and a 4.0% unemployment rate.

 

 

Trade Deficit Grows

Other key economic data on the day included a report from the Commerce Department which indicated a widening of the US trade deficit in February.  The overall trade gap expanded to its widest level in the past nine and a half years, up 1.6% to $57.6 billion ($56.8 billion expected) for the month, as exports and imports both climbed 1.7%.  It was the sixth consecutive month that a widening in the trade deficit was recorded, a streak last seen in 2000.  The heavily scrutinized trade gap with China fell 18.6% to $29.3 billion during February, however it remains 20.2% higher overall on the year.  The next highest trade deficits by country include the European Union ($12.1 billion) and Mexico ($6.1 billion).