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On April 4, local time on April 3, U.S. Secretary of Health and Human Services Robert Kennedy Jr. said that about 20% of the layoffs in the Department of Government Efficiency were wrong and needed to be corrected. The U.S. Department of Health and Human Services laid off about 10,000 people on the 1st. Kennedy said that people who should not have been laid off were laid off, and the department is restoring their positions. Kennedy said that canceling the entire lead poisoning prevention and monitoring department of the Centers for Disease Control and Prevention was one of the mistakes. At present, it is unclear what other projects Kennedy may plan to restore.Bank of Japan Governor Kazuo Ueda: Will consider the impact of food costs on consumers.On April 4, local time on the 3rd, the automobile company Stellantis said that due to the impact of the US import automobile tariff policy, the company decided to lay off 900 employees in its five US factories and suspend production operations at two assembly plants in Canada and Mexico. Antonio Filosa, Chief Operating Officer of Stellantis Americas, said that the US factories that were laid off were powertrain and stamping parts factories, which produced spare parts for two assembly plants in Canada and Mexico. According to the plan, the assembly plant in Canada will stop production for two weeks, and the assembly plant in Toluca, Mexico will suspend production throughout April. Filosa said the company is "continuing to evaluate the medium- and long-term impact of tariffs on operations."Bank of Japan Governor Kazuo Ueda: Non-weather factors may push up food prices.Bank of Japan Governor Kazuo Ueda: Price changes in goods frequently purchased by households may affect consumer sentiment and the underlying inflation rate.

The US Dollar Index maintains a level below 98.00, as sluggish GDP and ADP Payrolls rekindle concerns

Drake Hampton

Mar 31, 2022 09:54

Key Takeaways

  • The DXY has fallen below 98.00 following a disappointing performance by the US GDP and ADP Payrolls.

  • The risk-taking instinct has eroded the allure of safe-haven assets.

  • This week's big events include the US NFP and Russia-Ukraine peace negotiations.

 

The US dollar index (DXY) is under pressure from sluggish US economic indicators and increased demand for risk-sensitive assets following a positive conclusion from the first face-to-face Russia-Ukraine peace negotiations in Turkey. The big dollar-denominated index has fallen below 98.00, which has served as a significant support level in recent weeks.

Changes in the US GDP and ADP Employment

Wednesday's poor performance by US economic indices triggered a sharp sell-off in the mighty dollar. The US Bureau of Economic Analysis reported quarterly Gross Domestic Product (GDP) growth of 6.9 percent on an annualized basis, somewhat lower than forecasts and the previous print of 7%. While Automatic Data Processing (ADP) reported Employment Change of 455k, which was less than the market consensus of 450k and the previous print of 486k.

The positive consequence of Russia's peace talks with Ukraine

The withdrawal of Russian forces from northern Ukraine and the capital Kyiv following the conclusion of negotiations between Russia and Ukraine has bolstered market mood. Risky assets are gaining traction in an upbeat market environment, as investors view the event as a positive step toward a ceasefire. While Ukraine has recommended adapting a neutral position in light of its decision to refrain from alliances. On April 1, the nations will resume their peace talks through the internet.

 

This week's significant events include the release of Core Personal Consumption Expenditure, Initial Jobless Claims, Nonfarm Payrolls (NFP), the Unemployment Rate, and the ISM Manufacturing PMI.

 

On the back burner, prominent subjects include the Russia-Ukraine peace talks, the OPEC meeting, and Fed President John C. Williams' address.

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