Following the last major data release out of the US this week, the United States Dollar is holding onto losses this morning after managing to eke out some modest gains during yesterday’s session.
Overview
Chatter overnight from Chinese officials and surrogates hinting at trade talks with the US to move toward warner waters between the world’s two largest economies is managing to bring some risk-forward sentiment into markets this morning. Non-farm payroll data for April showed that the US added approximately 177,000 jobs last month, 167,000 of which were in the private sector. March and February’s numbers, were both revised downward. Unemployment remained steady at 4.2% last month.
The surface reading of today’s NFP figures is positive, surely, and showed that tariff-related uncertainty has not quite yet hit the US job market. The survey week for this release was, however, the week immediately following April 2nd’s “Liberation Day” announcements so it’s possible that more impacts have been felt through the back half of last month than are reflected in this survey. February and March’s downward revisions, too, do effectively wipe out the difference between expectations and the actual number for April. Odds of easing from the Federal Reserve did decrease slightly following the 8:30Am data dump, and traders now see slightly fewer than 4 interest rate cuts this year. With the Fed’s next meeting on the docket for this coming Wednesday, markets will undoubtedly be on tenterhooks for any discussion from Powell & co. of both this payroll release and Wednesday’s stagflationary GDP and price readings. April’s solid jobs report, though, does ease a bit of pressure on one side of the Fed’s dual mandate of both stable prices and employment.
What to Watch This Week…
- FOMC Interest Rate Decision, Wednesday 2PM
- Bank of England Interest Rate Decision, Thursday
- Monex USA Online is always open
The complete Economic Calendar can be found here.
AUD ⇑
The Australian Dollar is the biggest winner in the G10 this morning, followed closely by its peer in New Zealand, posting gains of 1.1% and 0.9% against USD respectively. AUD remains a popular risk barometer for traders around the world, and as a major trading parter of China is benefitting off the news that there may be room for trade talks between China and the US. President Trump, though, has said repeatedly that any trade deal with China would need to be on his terms. The Reserve Bank of Australia, in addition, meets later this month and is expected to cut interest rates by 25 basis points following a slight undershoot on retail sales for April.
CAD ⇑
The Loonie has resumed its winning ways this morning and is trading roughly half of a percent stronger against the Buck. The US’ mixed non-farm payroll bag helped buoy CAD this morning, but it appears the currency is trading mostly on trade talk optimism. Canadian Prime Minister Mark Carney, after not mincing his words on US trade policy during his victory speech earlier this week, is set to visit the White House within the next week according to President Trump, who said he thinks he and Carney “are going to have a great relationship.”
