NFP data pushed up real yield, which rippled through to the USDOLLAR and gold

  • USDOLLAR
    (${instrument.percentChange}%)
  • XAUUSD
    (${instrument.percentChange}%)

Friday's jobs data was stronger than expected. The non-farm employment change printed at 199K, which was ahead of the 184K forecast. This contributed to a lower unemployment rate of 3.7% (3.9%), whilst average hourly earnings came in at 0.4% m/m, double last month's 0.2% m/m.


Source: www.tradingview.com

This saw the 10-year real yield jump on the release (red upwards arrow) and head up. In turn, the USDOLLAR, which is positively correlated to the real yield, has pushed up whilst gold, which is negatively correlated to the real yield, has declined below the $2,000 level.

The next significant data release will be tomorrow's CPI and it will be interesting to see its affect on the real yield. However, it is Wednesday's FOMC statement and press conference which is likely to be the significant driver of yields for this week.

It is widely expected that the Federal Reserve keeps rates steady on Wednesday, however the tone of the statement and press conference will have an impact. The individual Fed forecasts will play their part. A higher for longer message may see a hawkish bias in yields. This will continue to affect financial instruments such as FXCM's USDOLLAR basket and XAUUSD.

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Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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