The dollar is growing along with bond yields after data from the US labor market

The yield on 10-year bonds continues to rise and gradually renews highs. On Friday, US Treasuries, for a moment, reached 1.122%, which is the best indicator since February last year. US 2-year bonds peaked on December 9^th. The growth catalyst was the data on wages. If such positive dynamics continue, the market will question the feasibility of keeping low interest rates for a long time by the Fed.

Following bonds, the dollar index and the stock market continue to grow. If Wall Street is convinced of the need for the dollar to rise, since the greenback, according to some funds, has reached a zone of significant oversold, then the stock markets are not so simple. Risky assets are now working on the "bad news – good news" principle. The job market is in stark contrast to stock prices. Substantial job cuts and over 10 million unemployed people are still identified with economic problems. Against this backdrop, investors fear the market overheating.

Nonetheless, the risky asset market continues to rally as Wall Street funds see the NFP as a catalyst to accelerate the issuance of $2,000 checks to individuals. Thus, S&P 500 and Dow Jones futures continue to renew highs, pulling up European assets. Given this background, gold fell sharply to lows on December 8.

The epidemiological situation remains unchanged. Japan said it has discovered a new strain of coronavirus similar to that found in the UK and South Africa. It is difficult to immediately determine how contagious the strain is and the effectiveness of current vaccines against it, officials say.

Main market quotes:

S&P 500 (F) 3,796.62 -20.88 (-0.55%)

Dow Jones 31,097.97 +56.84 (+0.18%)

DAX 13,989.25 -60.28 (-0.43%)

FTSE 100 6,844.93 -28.33 (-0.41%)

USD Index 90.472 +0.404 (+0.45%)

by JustMarkets, 2021.01.11

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.