Markets:

  • Gold flat at $1814
  • US 10-year yields flat at 3.97%
  • US 2-year yields hit 5.08% -- highest since 2007
  • WTI crude oil down $1.05 to $76.53
  • S&P 500 up 4 points to 3994
  • GBP leads, CAD lags

It's all about the FOMC from here and what economic data points mean for the Fed. Today the JOLTS data was on the hot side so the US dollar strengthened, but at the same time Powell pushed back on market expectations for 50 bps by saying that a bigger hike wasn't planned but that the Fed was going to watch the data.

On net, the market is happy to bet on 50 bps still with the implied probability at 70% and you can see that in the front end of the curve, with the 5-year busting through the 5% barrier and widening spreads versus the world.

Overall, there was some volatility today and an attempt to sell the US dollar and buy stocks but it was reversed in short order and the US dollar is wrapping up the day essentially unchanged on every front.

The one exception is USD/CAD, which finishes the day up 45 pips after touching a four-month high at 1.3815. There was some thinking that the BOC would take a more-hawkish shift in light of the hotter inflation backdrop globally but the BOC didn't offer any hint that it was going to get off of 'pause'. If anything, this week shows that parts of the world are on different tracks with bubble housing markets like Canada and Australia feeling high rates.

USD/CAD initially jumped and continued higher afterwards with some help from falling oil prices.

All the focus is rightfully on data now and that could keep Thursday trading in narrow ranges but Friday's non-farm payrolls report is goign to be a big one. Chris Weston from Pepperstone notes that NFP has beat expectations for 10 months straight.

FX news wrap daily March 8