S&P 500 Opens Lower After Jobs Report

Key Insights

• U.S. Dollar Index declined towards the 104.50 level.
• Gold rallied towards the $1850 level.
• S&P 500 moved lower due to SVB Financial Group’s problems.

Unemployment Rate Rises To 3.6%

On March 10, U.S. reported that Non Farm Payrolls increased by 311,000 in February. Unemployment Rate grew from 3.4% in January to 3.6% in February, while analyst forecasted that it would remain unchanged. Interestingly, Participation Rate increased from 62.4% to 62.5%, which should make the labor market less tight.

FedWatch Tool indicates that there is a 51.6% probability of a 25 bps rate hike at the next Fed meeting in March. Yesterday, traders prepared for a 50 bps hike. However, problems of the SVB Financial Group, which has a liquidity crisis, triggered a flight to safety and pushed Treasury yields to lower levels.

It remains to be seen whether the important Non Farm Payrolls data will have a significant impact on markets today as traders may stay focused on SVB Financial Group and the banking sector in general. The potential banking crisis in the venture capital sector may have a material impact on market sentiment.

U.S. Dollar Tests New Lows

U.S. Dollar Index declined towards the 104.50 level after the release of job market data. Unemployment Rate rebounded towards the 3.6% level, which signals that Fed’s actions have finally put some pressure on the job market. This is bearish for the U.S. dollar as Fed may be less aggressive if Unemployment Rate continues to move higher.

Gold rallied towards the $1850 level as traders focused on weaker dollar and lower Treasury yields. Demand for safe-haven assets is rising, which is also bullish for gold markets.

S&P 500 moved lower at the opening as traders worried about the potential contagion from SVB Financial Group’s problems.

For a look at all of today’s economic events, check out our economic calendar.