Another quiet one

Anti-climax

Two men have been arrested in Quebec, charged with stealing five million bees. They allegedly took the half-ton of apidae to get a buzz, which is more than they would have got from the FX market on Friday.

With the exception of the South African rand, which strengthened by 1.5%, the biggest move was the 0.3% by which the US dollar and the euro went up against the Canadian dollar. There was no obvious reason for the rand's upward pop. It looked as though investors were taking profits on short positions: the rand is still down by more than -3% on the week.

But for a dozen or so ticks here and there, sterling was unchanged on the day against the Swiss franc, the Japanese yen, the Canadian, Australian and New Zealand dollars and the Swedish krona. The US dollar and the euro became the class leaders with gains of less than half a cent. Excitement was in short supply. 

Uninspiring payrolls

As expected, the US employment data were the highlight on Friday, but one that shone only briefly. There was a flurry of obligatory excitement around the time of the announcement: it did not last long and had little lasting effect on exchange rates.

Analysts had expected US non-farm payrolls to have increased by 200k in April, with unemployment steady at 5% and average hourly earnings continuing to rise by 0.3% a month. They got the unemployment and earnings numbers right but they were off- target with payrolls, which increased by only 160k on the month. Moreover, downward revisions to the figures for February and March meant an overall shortfall of 59k jobs. 

The data provoked a burst of activity, during which sterling covered a range of more than a cent. However, it generated more heat than light and within half an hour prices had mostly returned to their levels prior to the announcement. It seemed that investors were happy to offset the lower-than-expected payrolls figure with a pickup in the annual rate of earnings growth from 2.3% to 2.5%.

Slowing Chinese trade

If investors did not care much about Friday's softer US payrolls data they cared even less about some quite unpleasant trade figures from China earlier today. Exports were down by an annual -1.8% in April and imports by -10.9%. There was no reaction whatsoever from the commodity currencies.

It was less of a surprise when investors ignored this morning's -0.8% fall in Australian job advertisements and a deterioration in Japanese consumer confidence from 41.7 to 40.8. They were more interested in figures from Germany, which showed factory orders rebounding by 1.9% in March, but made only a half-hearted effort to buy the euro.

Nothing on today's agenda looks likely to stir the FX market from its torpor. There are data on only Swiss inflation, Euroland investor confidence and Canadian housing starts. Even the Greek debt negotiations in Brussels seem to be going smoothly. It could be another quiet one.