By ForexMansion.com
Switzerland’s leading economic indicator remained strong in March, reaching the highest level in four and a half years. The KoF came in at 2.24 in March versus 2.19 in February, which was much better than expected and will confirm the outlook for the SNB going forward. The latest readings of the KoF and PMI are consistent with robust Swiss GDP, upwards near 2.8-3.1% GDP.
EUR/USD remained resilient in the face of another S&P downgrade to Portugal and Greece, though peripheral bond and CDS prices moved in response. This pattern is likely to persist as long as markets have confidence in the solvency of Spain. Spain’s 5-year CDS, for example, has fallen by 138bps since its recent peak in early January. Tomorrow German economic data will likely drive the markets. Retail sales at (600 GMT) and the Employment Report at (755 GMT) will be market moving events.
The dollar climbed against the Yen as solid employment data lifted the dollar. US private sector jobs increased by 201,000 in March, according to payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. Economists surveyed had expected ADP to report a job gain of 200,000 in March. The February data were revised to show a rise of 208,000 versus the 217,000 increase first reported.
The ADP report has been a descent predictor of the BLS report that will be released Friday at 1230 GMT. Analyst expect total nonfarm payrolls to increase by 195,000 in March, not much different from a gain of 192,000 in February. The March unemployment rate is expected to stay at February’s 8.9%.
US yields continued to back up moving closer to the 3.5% level. The ten-year note price is tracking very close to the 50-day moving average at 3.47%. The range of 3.2% – 3.7%, has encapsulated the range since December 2010.
Originally posted here
