US Open – Yields initially spike on big NFP beat, Dollar rises

An impressive US nonfarm payroll report showed that the economic recovery is gaining momentum and sent both bond yields and the dollar higher.  The US economy saw 379,000 jobs return, much higher than the 198,000 estimate, and the strongly revised higher 166,000 prior reading.  Expectations will be high for hiring demand to remain robust since many states are reopening.  Seniors that got vaccinated are already ready to travel and many millennials are ready to get back to where we were before the pandemic.

The job just got harder for Democrats to push through Biden’s $1.9 trillion COVID relief bill.  The US economy is starting to look a lot better and that will trigger concern over the size of the bill from conservative democrats.  The Biden administration will need to pass this bill by this weekend and that will mean they will likely capitulate on having a smaller price tag, with the bill ending up being closer to $1.4 trillion.

US stocks were all over the place following the stronger-than-expected employment report.  The growth outlook is looking better and that should continue to push Treasury yields higher across the curve.  With steady wage increases, that might be supporting the argument that inflation concerns are far away.

Investors probably won’t hear again from Fed Chair Powell until the March 17th FOMC meeting, so the move higher in Treasury yields could continue.  The pullback with US stocks could be nearing an end as US growth exceptionalism should start to attract investors.


The dollar rallied across the board immediately following the better-than-expected nonfarm payroll report.  The US economy is heading in the right direction and that should keep the dollar in demand.  The dollar could continue to rally over the next week since the Fed is not showing any signs they are close to pushing back against the rise in yields.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya