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Forex Flash: Friday US market recap sees Dow cracking 14,000 – Deutsche Bank

Recapping last Friday's session, US equities began the month of February on the front foot as the Dow Jones (+1.1%) closed above 14,000 for the first time since 2007 and the S&P 500 (+1.0%) forged new post-financial crisis highs. Gains were helped by a solid set of data on both sides of the Atlantic, headlined by US non-farm payrolls that rose 157k in January, or a touch below expectations of 165k.

Moreover, markets were encouraged by upward revisions to December, which saw the level of payrolls increase 647k compared with previous estimates, including a 150k cumulative revision over 4Q2012. The result is that the three-month average payrolls to January jumped to 200k compared with a 3-month moving average to December of 151k (prior to the revisions). Perhaps the only disappointment was the unemployment rate, which nudged higher from 7.8% to 7.9% despite a steady participation rate of 63.6%.

The Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank noted that the stronger US data prompted another round of weakness in Treasuries to see the 10yr yield close above 2% for the first time since mid-April 2012 – to be exact the 10-year closed at 2.015% on Friday with the 3bp rise adding to the 23bp sell-off during the month of January.

Forex: GBP/USD at 1.5725 after UK PMI Construction

A distinctive plunge was seen on Friday, with almost 200-pip range throughout the day, reaching as low as 1.5690. The surrounding area of 1.5700 has been able to offer support several times last week and that seems to be happening now, as the GBP/USD bounces on Monday, with +0.15% of daily gains, at 1.5722.
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Eurozone: Sentix Investor Confidence up to -3.9 in February

The Eurozone Sentix Investor Confidence survey revealed that sentiment rose to -3.9 in February, following a -7 reading the previous month. Market consensus pointed to a bigger improvement to -3.0.
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