Home Trading US Close: A cooling wage/hot payroll report, Banking System Fears, Rate Hike...

US Close: A cooling wage/hot payroll report, Banking System Fears, Rate Hike bets slashed, SVB fails, Oil rebounds, Gold shines bright, Crypto breaks below $20k



US stocks closed lower during volatile sessions as traders digested the SVB contagion and cooling wage reports. This was supposed to be an easy Friday with one massive jobs report, but SVB, a large bank with exposure across a range of sectors failed and triggered distress for several other smaller banks. 

Traders see this cooling/hot payroll report to be confirmation that Fed policy remains restrictive and that their tightening work has almost finished.  If we didn’t have SVB’s failure and contagion risk the case for a half-point rate hike would be valid. The focus will fall on SVB contagion risks and Tuesday’s inflation report.  As long as we don’t see a scorching hot inflation report, the Fed should continue with its quarter rate point hiking pace.  

Data from the USA

In February, the US economy added 311,000 jobs. This is more than the consensus estimate of 225,000 or the whisper estimate of 250,000.  While the NFP report received a strong headline, the rest of it supported the belief that the labor markets are cooling.  The unemployment rate increased from 3.4% to 3.6%, and wage pressures were much lower than expected. 

Fed rate hike chances went on a rollercoaster…

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