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Jobs day in the United States today

By OFX

It is jobs day in the US today with the Non-Farm Payroll report will be released at 8:30 am. The consensus is for 198k started for April. Two days of US-China trade talks come to an end with little accomplished other than let’s keep the channels of communication open.

Federal Reserve speech’s come from William Dudley and John C Williams today at 12 pm and 3 pm respectively.

Drill rig activity is also reported on today at 1 pm with the Baker Hughes US Oil Count; the previous report showed 825 rigs active. The count is an essential barometer in the oil drilling industry as the more rigs that are active more services, and product consumption is required, the fundamental is a leading indicator of demand for oil products.

Very light on the economic calendar for Canada today, with only Ivey PMI released mid-morning. The PMI is a private sector survey that measures purchasing manager’s activities in Canada; consensus is for a reading of 60.2 from previous of 59.8.

The Canadian dollar remains resilient over it trading peers and has been well supported heading into the last trading day of the week.

The loonie will be subject to change when we have the US jobs report out at 8:30 am today and volatility will come from USD strength or weakness after the payroll data. Canadian job numbers will be released next Friday at 8:30 am.

The economic slowdown in the Eurozone of late has seen a lot of last year’s gain erased, and persistently under-target inflation isn’t helping its cause either. Latest figures released yesterday saw CPI miss target with the overall reading slipping to 1.2% and the core reading dropping to 0.7% from 1%.

Yesterday also saw the latest EU Economic Forecasts released which highlighted the moderation in output in the Eurozone and the potential risks caused by global growth from Trump initiated trade disputes. EUR/USD remains under pressure with 1.20 acting as resistance ahead of this afternoon American Employment data.

Yesterday saw a rebound in the Markit/CIPS UK Services PMI following March’s disappointing reading with the gauge pushing up from 51.7 to 52.8 in April. Markets had penciled in 53.5 so the miss saw a modest sell-off in the pound with GBP/USD dipping back under 1.36 however the reaction was pretty muted.

The report’s authors noted: “The overall expansion signaled by the three surveys in April was the second-weakest since the Brexit vote, pointing to a quarterly rate of GDP growth of around 0.2% at the start of the second quarter….

The disappointing services data will add to expectations that the MPC will take its finger firmly off the rate hike trigger. Any further slowing will also raise questions as to whether the November rate hike may have been ill-timed.” Overnight the results of the UK local elections has been announced with (as I write) UKIP being the big loser, the Tory’s treading water and Labour and the Lib Dems making gains. GBP/USD is still under 1.36. 

Recording another impressive trade surplus in March, accounts released by the Australian Bureau of Statistics yesterday showed Australia’s trade surplus rose to $1.527 billion in seasonally adjusted terms. Comfortably exceeding expectation, additional positivity was thrown into the mix domestically following the release of numbers which revealed dwelling approvals rose by 0.2 percent in March. 

Noting the Australian dollar has now settled at a much lower tier following the aggressive sell signs which materialized last week, trading ranges yesterday of 0.7485-0.7542 were mainly in line with what witnessed during Wednesday’s session. In looking for an essential weekly close now above the 75 US cents barrier, it appears topside progress will remain capped for the time being in the absence of any weighty greenback moves.

Opening marginally stronger versus its US counterpart at a rate of 0.7532, investors will be keeping close tabs on today’s monetary policy report from the RBA should policymakers provide deeper context behind their decision on Tuesday to keep interest rates on hold.

Momentum for the bullish US Dollar has taken a breather overnight as the New Zealand Dollar reached oversold territory in the past month's decline. Reaching a yearly low of 0.6982 early yesterday morning following the release of FOMC minutes, The Kiwi has potentially turned the tide and bounced off psychological support levels at US 70 cents over the past 24 hours.

Opening the morning at 0.6995, Upside ensured after a positive monthly reading of ANZ Commodity prices in April gained 1%. The primary catalyst for the increase was a boost in dairy and aluminum prices after trade tensions between USA and China. With a close above US 70 cents in the domestic session, we saw an eventual high of 0.7045 in overnight trading after a weaker Non-Manufacturing PMI print in the United States.  

NZD/USD opens this morning at 0.7040 and with no domestic data out today we look towards Non-Farm Payroll figures this evening.