The U.S. dollar fell to a 3 week low against the Japanese yen on Monday following the release of Friday’s disappointing December employment report which showed the U.S. economy added just 74,000 jobs in December, the lowest number since October 2011.
Although most economists believe that the disappointing December employment report won’t sway the Federal Reserve from altering their plans to taper $10 billion in quantitative easing dollars beginning in January, a pattern of continued weak employment data in 2014 combined with low inflation could lead the Fed to re-examine the timing of withdrawing monetary stimulus from the economy.
Whether the weaker than expected December employment data was due to a confluence of cold weather impacting hiring across the country and uncertainty about adding healthcare jobs following the rollout of the Affordable Care Act, the disappointing employment report in one the busiest retail months has raised some eyebrows and forced economists to wait for further employment data to judge the health of the employment picture for 2014.
After the U.S. employment was reported on Friday the yield on the U.S. 10 yr. Treasury fell sharply to 2.86 percent, well below the 3.00 percent level that it reached in the middle of last week.
Tomorrow the market will begin to digest bank earnings reports as earning season kicks off with a variety of large banks posting quarterly earnings, including J.P. Morgan Chase, Morgan Stanley, Goldman Sachs, and Citigroup.