USD, +1.53%JPY, +0.97%GBP 0.77%CHF +1.72%AUD +0.56^CAD +1.28%NZD +0.45%
The USD was one of the weakest with declines vs all the major currencies with the exception of the CHF:
EUR -1.53%JPY, -0.54%GBP -0.77%CHF +0.21%CAD -0.32%AUD -1.02%NZD -1.12%Merz’s plan signals a willingness to borrow significantly for defense, despite previously campaigning on fiscal responsibility. However, to secure the deal, he conceded to €500 billion in public-works spending over 10 years, a major win for the SPD. With coalition negotiations ongoing, it remains uncertain whether he can offset costs through welfare reforms.
ADP employment rose 77K vs 140K estimate. The data does not include public sector employment changes which is weakening due to the DOGE cuts. Friday, the BLS data will be released with Non Farm payroll estimated at 159K. US S&P Global PMI services came in stronger than the preliminary at 51.0 vs 49.7. The composite imprived to 51.6 vs 50.4 preliminary but was lower than last month at 52.7The ISM services PMI came in at 53.5 vs 52.6 last month. Employment improved to 53.0 vs 52.3. New orders also improved to 52.2 vs 51.3 but prices paid moved higher to 62.6 vs 60.4 last month. Factory orders (and Durable goods orders (final) were marginally better than expectations.
Tariff fears continued today, but reports of a potential 1-month reprieve from tariffs helped to give stocks a boost. There were other reports of a call between Trump and Canada PM Trudeau which took some of the fear away from the markets.
In the labor market, employment rose slightly, with job growth in healthcare and finance but declines in manufacturing and transport. Labor supply improved, but immigration uncertainty raised concerns. Wage growth slowed, with easing wage pressures in several districts.
IN other markets today, the US stock market closed higher led by the Nasdaq index. The index opened and was trading below its 200-day MA at 18385.97 for the morning. However, hope from tariff postponements helped to push indices higher and the price back above the key 200 day MA. Staying above that MA will be needed to give the buyers hope.The Nasdaq closed up 1.46%
In the US debt market, the yields were dragged higher by higher European rated. The US 10 year rose 6.9 basis points to 4.278%, but that paled in comparison to the European ratas which saw:
Germany 29.3 basis pointsFrance of 26.1 basis pointsSpain up 24.8 basis pointsItaly up 27.5 basis pointsEuropean stock indices also rose sharply:
German DAX +3.38%France's CAC +1.56%Spain's Ibex +1.40%Italy's FTSE MIB +2.08% This article was written by Greg Michalowski at www.forexlive.com. Read More Details
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