Daily Market Pulse
NFP, calm before the storm
5 minute readThe Weekly US Jobless Claims figure was released this morning, showing +207k new filings, in line with expectations but still, a very low number pointing to continued economic labor strength. This contrasts yesterday’s weak ADP number but is in line with Tuesday’s robust JOLTS Job Openings. However, all of these figures pale in importance to tomorrow’s US Non-Farm Payrolls figures to be released at 8:30 am EST. The survey is as follows:
Risk started the daywith a positive tone, temporarily reversed course after the weekly jobs numbers, and is now practically unchanged across the board. The market will likely tread water ahead of tomorrow’s data, but it is worth keeping an eye on the speeches of the Fed’s Neel Kashkari, Mary Daly, and Michael Barr, all speaking separately today.
EUR/USD has managed to stay on a 1.0500 handle overnight as mixed messages from ECB membership bring little in the way of confidence. ECB Vice President Luis de Guindos said it is premature to discuss rate cuts, while Governing Council Member Peter Kazimir discussed his hopes that interest rate hikes are finished. One metric that some are keeping an eye on is the spread between German and Italian government bond yields, which remains elevated, a potentially negative indicator for the EUR.
USD/CAD was only 14 pips shy of trading on the 1.3800 handle overnight before retracing back to near-unchanged. The market is eagerly anticipating tomorrow’s Canadian employment data and watching the price of oil, which is retracing a bit from recent strength.
GBP/USD has been rangebound overnight in the mid 1.2100 handle, even as Bank of England Deputy Governor Broadbent made dovish comments about “clear signs” of a weakening UK economy.
USD/MXN is one of the weakest performing pairs today, breaching 18.0000 again as some MXN bulls unwind positions following the breach of the 200-day moving average. Emerging market currencies are faring weakest against the USD after securing some of the most substantial gains year-to-date.
USD/BRL is essentially unchanged this morning after breaching its 200-day moving average in the face of lower commodity prices. It is worth noting that implied volatility remains high in the options market, so fluctuations in spot may extend at times.
