U.S. Treasurys, Gold Rally as Risk-Off Trend Continues

Global demand for safe haven assets remained fluent in today’s trading session as geopolitical risks continue to threaten the economic outlook.  The standard measure of investor concern in US equity markets reached a five-month high, driven largely by the unraveling of US relations with Russia and North Korea.  US Treasurys resumed yesterday’s rally, with yields/swap rates decreasing an additional 4-8 bps across the curve, bringing the yield on the 10-year note to its lowest level since last November.  In a similar risk-off fashion, all three major US stock indices finished down 0.05%-0.25% on the day, led by losses in the financial sector despite comments from President Trump that stated his administration’s intention to revamp the Dodd-Frank law.  In commodities, both crude oil and gold extended their streak of gains, with WTI crude rising for the 6th straight day to $53.25/barrel (+0.3%) and gold futures advancing for the third consecutive session to $1,273/ounce (+1.5%).  The US dollar shed 0.3% against major currencies, as the Japanese yen climbed to its highest mark since November at 110 JPY/$.

US economic data reporting today was highlighted by the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), which displayed results consistent with a tightening of the jobs market conditions.  Detailed in the release, the number of US job openings rose by 118,000 in February to a seasonally adjusted pace of 5.7 million, representing a 7-month high.  Pointing to mismatch in skills during the month, the rate of hiring conversely declined from 3.7% to 3.6%.  Also noted in the report was a marginal decline in the voluntary job quits along with a holding steady of the layoffs rate at 1.1%.