US Dollar Up as Wage Inflation, Biden Stimulus Pledge Drive Fed Outlook

The US Dollar rose in the wake of December’s labor market report on Friday. While the headline payrolls print disappointed, showing the economy shed 140,000 jobs last month instead of adding 71,000 as projected by economists, wage inflation unexpectedly spiked to a seven-month high of 5.1 percent on-year. Tellingly, the markets responded to the release with what seemed like a shift away from dovish extremes on Fed policy expectations. The slope of the US Treasury yield curve (10y-2y) steepened alongside the spread between the benchmark US 10 year yield and an average of major alternatives. Gold prices sank. Traders … (full story)

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