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Fundamental Afternoon Wrap: NFPs roar

A understandably quiet afternoon for institutional research has seen an obvious focus on NFPs which shattered expectations and some reflection on Draghi´s performance yesterday and the implications looking forward.

USD

BNP Paribas economist Alexandra Estiot comments on today's impressive NFP numbers commenting the trend is good and supportive for households’ purchasing power and confidence. However, they are not expecting the Fed to react yet. Marc Chandler of BBH notes that the US jobs data was consistent with the recent string of data, clearly showing a surprising resilience to the anticipation of tightening of fiscal policy. Rob Carnell of ING notes that following today´s NFPs he feels that the near term market reaction will be to sell the back end of the yield curve, and for equities and the dollar to rally, most notably against JPY and GBP:

EUR

Reflecting on yesterdays ECB meet, the European economics team at BAML comment that the policy statement was as usual bland but that he highlighted the point that the ECBs policy was extremely accommodative and how committed the ECB is to maintaining its stance. The interesting part for them was the near near commitment to monetary policy by Draghi, by ensuring that it would keep liquidity available at low rates for as long as necessary and would monitor short term “eonia, both spots and forwards.” Brown Brothers Harriman analysts comment on the resilience of the Italian asset markets, despite the lack of progress towards political clarity.

Forex: GBP/USD bounces from 1.4887 spike low to 1.4950

The GBP/USD is getting deeper into mid-2010 lows as the pair went as low as 1.4887 and July 2010 low was printed at 1.4878. The trigger for the ~150-pip plunge was the improving US labor market data, surprising investors with more jobs and a lower unemployment rate than expected.
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Precious metals pare losses during US trading, silver retakes 29.00 level

The initial first take of the extremely solid US data roiled gold prices, sending them crashing to a weekly/session low of 1560.95. Earlier in the US, the highly anticipated Nonfarm Payrolls (February) came in at 236K, against projections of 160K and compared with 157K previously. Unemployment Rate (February) has also steadied at 7.7%, which beat expectations of 7.9%. However, shortly after the US open, prices rallied steadfastly, paring losses and surging back into positive territory to trade at USD $1579.50 per oz. in these moments.
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