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AFEX Market Watch - 31st March 2021

What Happened Yesterday

 AUDUSD traded at a high of 0.7664 in the afternoon before falling as low as 0.7581 an hour before the New York close. It was a story of USD strength rather than risk-off and AUD weakness with volatility actually falling. Rising US bond yields led the USD higher with the 10-year note rising to a fourteen month high. The catalyst for the move was the release of the US Consumer Confidence survey which jumped to a one-year high.

 America’s highly anticipated jobs report on Friday night is expected to reveal 652k new jobs were created this month, up from 379k last month. Last night Federal Reserve member Raphael Bostic predicted “We could see a burst of activity and performance coming into the summer which could lead us to see even more robust recovery” adding that “A million jobs a month could become the standard through the summer.”

 Commodity prices fell with oil 1.7% lower following the clearing of the freighter that had been stuck in the Suez Canal for a week. Iron ore was 0.8% down at the $166 a ton level. Gold looks poised to break the $1,675 support level and could return to levels last seen in Autumn of 2020. Share markets overseas were higher and the ASX is likely to rise on the open today.

Major Risk Event

Two covid-19 vaccines have been found to be nearly as effective in the real world as they are under lab conditions. America’s Centres for Disease Control and Prevention published a study showing that both the Pfizer-BioNTech and Moderna jabs were about 90% effective in preventing infections after two doses, compared with around 95% effective in clinical trials.

Today’s Agenda

ADP, the largest payroll provider, releases its prediction of the official US employment report that is due on Friday night. This will have a bearing on USD trading. European inflation data is expected to remain at 1.1%, well below the ECB’s 2% target. The highlight during the Asian session will be the China PMI numbers that are likely to exhibit an improvement in business activity in the last month.

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