Due to the Good Friday holiday, European and American stock exchanges will remain closed, as will B3 in Brazil, but the important official report on the US labor market, the payroll, referring to March, will be released normally to 9:30 am (Brasília time), which raises the concern that investors may be vulnerable in some assets, mainly due to the reaction it may cause in the Treasuries market.
The future trading of commodities such as gold and oil (Brent and WTI) will also be closed, but the international exchange market is functioning between the dollar and some currencies, with the DXY index, which measures the performance of the American currency against a basket of currencies. strong, slightly down 0.05% to 92.872 points in a low liquidity session. However, the main point of attention for those who are not willing to shut down entirely on the holiday will be in the US Treasury bond market.
Last year, the Treasuries market remained closed on Good Friday, as were the American stock exchanges. However, this year, US bond trading is open until 1:00 pm (Brasília time), while the March payroll will be revealed at 9:30 am under the expectation of some economists that the generation of vacancies in the period may have approached 1 million, signaling a heating up of the US economy that may reflect in long-term interest rates.
The estimate of economists surveyed by the Wall Street Journal is that 675 thousand jobs were created last month, almost double the 379 thousand new jobs created in February.
The escalation of yields on long-term American bonds is the most monitored topic at the moment, as the interest on ten-year bonds is the main reference for the future interest rate and the continuation of the increase may oblige the Federal Reserve (Fed) , the American central bank, to promote a monetary tightening earlier than expected to control inflation.
From January to today, 10-year Treasury yields have jumped from 0.9% to 1.7%, having recently approached 1.8%. This morning, they are at 1.682%, from 1.679% at yesterday’s close, but there are fears that the payroll may cause reactions that will be consolidated with delay.
“If we have a positive surprise, will the Treasuries market be trading more than usual?” said Kent Engelke, chief economic strategist at Capitol Securities Management.
In 1994, that was exactly what happened, the payroll came stronger than expected and the Treasuries market took a turn. That year, the bond market was completely closed as were the stock markets due to the Good Friday holiday.
“It was a week after starting to manage a fixed income department, and it was before cell phones. I was on the golf course, ”Engelke told MarketWatch. “The jobs report came in stronger than expected. Then, on Monday, the market was sold quite dramatically. ”
In addition, US government securities traded on Thursday will change hands next Monday, and securities traded on Friday would change hands next Tuesday, said Steve Feiss, head of fixed income at Etico Partners. “This is a risk for both the buyer and the reseller.”
Most of the time, Treasury bills tend to settle the next day after trading. On a practical level, this means that the securities move from the seller’s account to the buyer’s account the day after the transaction has been agreed
American markets will return to normal operations on Monday, as well as in Brazil, but European stock exchanges will return to work only on Tuesday.
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