Markets opened the trading week on a negative note, following the better-than-expected Non-Farm Payroll number, released last Friday in the US. NFP’s handily beat expectations, adding 256,000 jobs, which eased the pressure on the Fed to cut rates further. The Fed have already been overly cautious on their rate cutting cycle and this allows for even more scepticism. Markets have seen this and bond yields have been on the march. The 10-year is now fast approaching 5%, which is truly damaging for equity markets, and fuels the steady rise in the US Dollar. The EUR heads back to parity, falling below 1.0200 overnight, while the GBP struggles to hold 1.2100.The seemingly endless rise in the reserve is killing commodity currencies, with the AUD crashing to 0.6130, while the NZD dropped below 0.5550. The uncertainty over the new Trump Administration appears to be the catalyst and the inauguration will soon solve that problem.
