• The US non-farm payrolls report showed a positive surprise, with the unemployment rate going up to 3.6%, and Bitcoin breaking $20,000 immediately afterward.
• The DXY retreated to 104.8 which caused a surge in major currencies like EUR and GBP.
• Markets are currently favouring 25bps for the upcoming FOMC meeting on 22nd March, with a terminal rate of 5.50%.

US Non-Farm Payrolls Report Surprises

The US non-farm payrolls report showed an unexpected positive surprise, with over 311k jobs created instead of the expected 205k. This led to an increase in the unemployment rate to 3.6%, however this was still lower than the estimated 3.4%.

Bitcoin Breaks $20K

Immediately following these figures being released, Bitcoin broke $20,000 for the first time since December 2020. This comes as no surprise given that investors have been favoring digital assets over traditional ones due to their increased safety and liquidity during uncertain economic times.

DXY Retreats To 104.8

The DXY index retreated to 104.8 following this news, which led to major currencies like EUR and GBP experiencing an uplift in value in comparison to USD. This shows that markets are still not convinced that inflation is going to rise despite higher job numbers being reported by NFP data release today.

FOMC Meeting Favoring 25bps

Markets are currently favouring 25bps for the upcoming FOMC meeting on 22nd March, with a terminal rate of 5.50%, suggesting that it is likely that there will be no further hikes this year even if inflation does rise significantly from hereon out..

Currencies And Probabilities Of Fed Meeting

Currencies reacted positively after NFP data was released (as seen on Trading View) while probabilities of Fed meetings continue to show favoritism towards 25 bps (as seen on CME). This suggests that markets are expecting no further hikes until at least 2022 even if inflation does rise significantly from hereon out..