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Here is what you need to know on Friday, February 5:

The market mood is upbeat amid optimism about the US economy, stimulus, and vaccines. Ahead of the Nonfarm Payrolls, the dollar is on the rise alongside yields, while metals are falling and cryptocurrencies are mixed. 

US jobless claims beat estimates by dipping below 800,000, adding to a winning streak of economic indicators. Stocks have been extending their gains, flirting with new highs and also buoyed by robust earnings from several firms and hopes that President Joe Biden will pass a large stimulus bill. It is still unclear what the White House can pass, but a package closer to the planned $1.9 trillion seems more likely. 

Regulators seem satisfied with the stability of the financial markets following the frenzy around “Reddit stocks.” GameStop (GME) extended its downfall from the highs on Thursday, prompting Robinhood to remove trading limits on the videogame firm’s shares and those of AMC. 

See GameStop is down another 42%, when does the collapse end?

US ten-year Treasury yields remain at high ground around 1.13%, supporting the dollar. EUR/USD dropped below 1.20 on Thursday and has failed to recapture that level.

GBP/USD recovered after the Bank of England clarified that it is all but abandoning setting negative rates. The BOE also expressed optimism about potential vaccine-related growth. The UK and the US are leading the Western world in immunizing their populations. 

Coronavirus: Statistics, herd immunity, vaccine calendar and impact on financial markets and currencies

Nonfarm Payrolls: The economic calendar is pointing to an increase of 50,000 positions in January, but releases toward the Nonfarm Payrolls report point higher, with some expecting 200,000. America’s Unemployment Rate is set to remain unchanged at 6.7%. 

See

  • Nonfarm Payrolls Preview: Dollar needs a strong number to keep rallying
  • Nonfarm Payrolls January Preview: Waiting for the dollar bid

Canada also publishes its labor figures, and there, a second consecutive month of declines is on the cards. USD/CAD is trading above 1.28, reflecting dollar strength rather than the recent increase in oil prices. 

Canadian Jobs Preview: CAD ready for a comeback? Three reasons for a positive surprise

Cryptocurrencies are mixed with Bitcoin edging up above $37,000, while Ethereum is stable on high ground and XRP is edging lower.