Employment market under scrutiny; US Dollar strengthened as Wall Street remained under pressure.
On Thursday, Wall Street fell after the 10-year Treasury rate surpassed 4%. In addition, yesterday's labor market figures continued to indicate an excessively tight situation.
According to a Labor Department data, the number of Americans filing new unemployment claims fell again last week, from 195k to 190k, indicating the labor market's continued improvement. According to a second survey, labor costs in the United States increased faster than anticipated in the fourth quarter, by 3.2% versus 1.6%.
Yesterday, the yield on 10-year Treasury notes, the standard for global refinancing operations, surpassed 4% to reach a fresh four-month high of 4.06%.
Related article: Bond trading and investing
The two-year yield, which more accurately reflects expectations for short-term interest rates, struck a record 15-year high of 4.93 percent.
After a poor performance in February, Wall Street indices entered March with considerable volatility due to the uncertainty caused by new indications of sustained price pressures and remarks from Federal Reserve officials indicating that interest rates will remain elevated for an extended term.
Traders will closely monitor today's release of ISM non-manufacturing statistics in order to gauge the evolution of the U.S. services sector and its potential impact on pricing levels.
Yesterday, as a result of rising market interest rates and the expectation that they will continue to rise in the foreseeable future, the US dollar surged significantly.
The dollar index is trading in a price concentration zone near 105.00 and slightly above the 100 and 200 day exponential moving averages, which provide support. From a technical standpoint, it is set to extend its upward trend to the 107 and 107.80 levels.
Related article: Dollar Index
Sources: Bloomberg, Reuters