US unemployment sets the pace for markets

Currencies

• Volatility on the euro picked up as the currency fell from 1.3678 to 1.3561 against the US dollar (USD) after Mario Draghi’s comments yesterday that negative interest rates were a possibility in the Eurozone. The single currency rose to 1.3636 short after.
• The US dollar (USD) suffered losses against the Japanese yen (JPY) as the pair fell below 102.04 in early trading. Investors will be interested in today’s US unemployment claims for more insight into the dollar’s direction.

Equities

• US equities are in decline as the US 500 (SPI) failed to break above resistance at 1820.00. The stock index has since retraced to 1808.26 as markets await the release of US unemployment data this afternoon; which will set the tone for the direction of the US economy.

Commodities

• Brent crude (BRT) is retracing as global demand wanes and supply considerations are eased. At 107.91 dollar per barrel, Brent has lost more than two dollars over the past week.

Mover & Shaker with forex options

• Gold (XAU) has been rising steadily over the past month against the dollar. The precious metal gained 50 dollars per ounce over February as investors take risk off emerging market currencies and into safe havens such as gold. Gold is currently trading at 1289.44 dollars per ounce.
• Options traders may consider constructing a Bull Call Spread on the gold which may appreciate in case the precious metal moves higher.
• A Bull Call Spread can be constructed by purchasing an at-the-money Call and selling an out-of-the-money Call.