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The NFP report shows a job increase of 303,000, exceeding expectations of 200,000 and surpassing the previous level of 275,000.
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The report also indicates a decrease in the unemployment rate to 3.8%. There's an increase in the labor force participation rate and a drop in wage growth to 4.1% year-over-year, aligning with expectations from the previous level of 4.3% year-over-year.
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Such a strong labor market should significantly reduce the probability of a rate cut in June. The market still prices in over a 50% chance of a cut in June.
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A strong economy may support further rises in the stock market, but with such data, the central bank will likely remain hawkish in the near term, as suggested by today's comments from Logan and Barkin. They point out that the labor market has not been this strong since the 1960s.
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Bowman also suggested that the Fed's monetary policy must remain restrictive to regain control over inflation. The banker noted that progress in combating inflation is slowing, or even at a standstill. If inflation turns out to be more "sticky" than initial forecasts indicated, and even returns to an upward trend, another interest rate hike is not ruled out.
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EURUSD reacted with a sharp decline after the report, falling below the level of 1.0800, but the pair returned to pre-NFP report publication levels.
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Gold rises to USD 2,325 per ounce, setting new records. Silver rises to USD 27.3 per ounce, gaining almost 10% this week.
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US indices almost entirely erased the losses from yesterday in the face of a strong economy at high-interest rates level. The Nasdaq gains 1.5%, and the S&P 500 rises by 1.3%.
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On the other hand, labor market data from Canada show an increase in the unemployment rate to 6.1%, and employment decreases by 2,200, the first decline since August last year.
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The combined probability of a cut in June rises to nearly 85%. However, USDCAD remains stable below 1.3600.
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Oil continues strong gains amid significant geopolitical uncertainty and production cuts, coupled with expectations of a strong American economy. Brent crude approaches USD 92 per barrel, and WTI tests USD 87 per barrel.
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Next Friday marks the start of the earnings season in the US with the publication of financial companies. We will learn results from entities like JP Morgan, Citi, and BlackRock, which is particularly interesting in terms of results related to Bitcoin ETF funds.
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Bitcoin remains close to yesterday's high closing, above USD 67,000.
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USDJPY returns above 151.5. There's speculation that currency intervention might occur only above 155.
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