Market Roundup
• Dollar falls to 2-1/2 month low after U.S. jobs data disappoints
• Trump sees 'good chance' of Mexico migration deal as clock ticks down to tariffs
• Sterling jumps after weak U.S. jobs data hammers the dollar
• US May Non-Farm Payrolls, 75k, 185k forecast 263k previous
• US May Unemployment Rate, 3.6%, 3.6% forecast 3.6% previous
• US May Average Earnings YY, 3.1%, 3.2% forecast, 3.2% previous
• US Apr Wholesale Sales MM, -0.4%, 0.0% forecast, 2.3% previous
• US Apr Wholesale Invt(y), R MM, 0.8%, 0.7% forecast, 0.7% previous
• CA Q1 Employment Change, 27.7k, 8.0k forecast, 106.5k previous
• CA Q1 Unemployment Rate, 5.4%, 5.7% forecast, 5.7% previous
• Italy to play low 2019 deficit card to avoid EU procedure
• Gold rallies to 14-month crest, on track for best week in 3 years
• Oil rises nearly 2% as Saudi Arabia signals OPEC deal extension
Looking Ahead - Economic Data (GMT)
• 9 Jun 23:50 Japan Q1 GDP Rev QQ Annualised, 2.1% forecast, 2.1% previous
• 9 Jun 23:50 Japan Q1 GDP Revised QQ, 0.5% forecast, 0.5% previous
• 9 Jun 23:50 Japan Q1 GDP Cap Ex Rev QQ, 0.5% forecast, -0.3% previous
• 9 Jun 23:50 Japan Apr Current Account NSA JPY, 1,515.5 bln forecast, 2,847.9 bln previous
• 10 Jun N/A ChinaTrade balance USD, 20.50 bln forecast, 13.84 bln previous
• 10 Jun N/A China Exports YY, -3.8% forecast, -2.7% previous
• 10 Jun N/A ChinaImports YY, -3.8% forecast, 4.0% previous
• 10 Jun 03:00 New Zealand Reserve Assets Total, 27,192 mln previous
Looking Ahead - Events, Other Releases (GMT)
• 8 Jun 06:20 Bank of Japan Governor Haruhiko Kuroda speaks in Tokyo
• 10 Jun 09:30 BoE's Andy Haldane speaks in London
• 10 Jun Member of the Monetary Policy Committee Michael Saunders speaks in London
Currency Summaries
EUR/USD: The euro strengthened against the U.S. dollar on Friday, after the U.S. Department of Labor's employment report showed that job growth slowed sharply in May and wages rose less than expected. The weak data suggest that the loss of momentum in economic activity has spread to the labor market, which will further support forecasts that the Federal Reserve will cut interest rates this year. Rising expectations of a cut have pulled the dollar 1.2% lower this week. Nonfarm payrolls increased by 75,000 jobs last month, falling below the roughly 100,000 needed per month to keep up with growth in the working-age population. Tepid employment added to lackluster data on consumer spending, business investment, manufacturing and homes sales suggesting the economy was losing momentum in the second quarter. The euro was up 0.50 percent at $1.1331. Immediate resistance can be seen at 1.1348 (Daily high), an upside break can trigger rise towards 1.1400 (Psychological level).On the downside, immediate support is seen at 1.1264 (5 DMA), a break below could take the pair towards 1.1213 (11 DMA).
GBP/USD: Sterling strengthened against the dollar on Friday, after weak U.S. jobs data weighed on the dollar and bolstered the case for a Federal Reserve interest rate cut. The opposition Labour Party beat off the insurgent Brexit Party which has sought to seize on anger with mainstream parties by pushing for a no-deal Brexit in a by-election in eastern England whose results came in overnight, although analysts said that with the ruling Conservatives coming in third it would not improve sentiment towards the pound by much. Helped mostly by an ailing dollar rather than because traders feel more confident that Britain can avoid a no-deal Brexit, the pound is on course for its first weekly gain in five. Sterling went as high as $1.2757, its strongest since May 21, and was last up 0.4% at $1.2743. Immediate resistance can be seen at 1.2737 (21 DMA), an upside break can trigger rise towards 1.2887 (Higher Bollinger Band).On the downside, immediate support is seen at 1.2688 (5 DMA), a break below could take the pair towards 1.2662 (11 DMA).
USD/CAD:The Canadian dollar strengthened to an 11-week high against its U.S. counterpart on Friday, as domestic data showing a record low unemployment rate supported the Bank of Canada's view that the economy will pick up. Canada added a higher-than-expected 27,700 net new jobs in May, which followed a record gain of 106,500 positions in April, and the unemployment rate dipped to a record low of 5.4%, official data showed. The Bank of Canada has said that a slowdown in the domestic economy was temporary. At (2124 GMT), the Canadian dollar was trading 0.72 % higher at 1.3265 to the greenback. The currency touched its strongest level since March 20 at 1.3263.Immediate resistance can be seen at 1.3372 (5 DMA), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3264 (200 DMA), a break below could take the pair towards 1.3100 (Feb 13th low).
USD/JPY: The dollar weakened against the Japanese yen on Friday, after a slowdown in U.S. job growth fueled hopes of a U.S. interest rate cut, while Washington's move to delay tariffs on Chinese goods cautioned traders. The U.S. dollar index dropped following the U.S. Labor Department's monthly report, which also showed wages rose less than expected in May. The jobs data suggested the loss of momentum in economic activity was spreading to the labor market, which could put pressure on the Federal Reserve to cut rates this year. Strong resistance can be seen at 108.16 (11 DMA), an upside break can trigger rise towards 109.31 (21 DMA).On the downside, immediate support is seen at 107.78 (Daily low), a break below could take the pair towards 107.00 (Psychological level).
Equities Recap
European stocks posted their best weekly performance since early April on Friday, aided by strong gains in Paris, against a backdrop of hope among investors that central banks would support global growth with more accommodative policies.
The UK's benchmark FTSE 100 closed up by 0.9 percent, FTSEurofirst 300 ended the day up by 0.91 percent, Germany's Dax ended up by 0.7 percent, and France’s CAC finished the up by 1.6 percent.
Wall Street's major indexes charged higher on Friday, as sharply slowing U.S. job growth boosted hopes for Federal Reserve interest rate cuts while optimism about potential progress in U.S. trade fights with China and Mexico added to risk appetites.
Dow Jones closed up by 1.01 percent, S&P 500 ended up 1.03 percent, Nasdaq finished the day up by 1.65 percent.
Treasuries Recap
U.S. Treasury yields tumbled on Friday, with 10-year yields hitting their lowest since September 2017 as domestic employers hired far fewer workers than expected in May, raising bets the Federal Reserve would lower interest rates.
In late U.S. trading, the yields on U.S. 10-year Treasury notes were 3.70 basis points lower at 2.086%. They touched 2.053% after the payrolls report, their lowest since September 2017.
Two-year yields were 3.20 basis points lower at 1.849%. They fell to 1.775%, which was just above their lowest since December 2017.
Commodities Recap
Gold prices jumped 1% on Friday to their highest levels since April 2018 as a sharp slowdown in U.S. jobs growth sent the dollar lower on growing expectations that the Federal Reserve would cut interest rates this year.
Spot gold was 0.4% higher at $1,339.97 per ounce at 2:34 p.m. EDT (1834 GMT), having earlier hit its intra-day high of $1,348.08.U.S. gold futures settled up 0.3% at $1,346.10 an ounce.
Oil prices rose nearly 3% on Friday, climbing further from five-month lows hit this week, after Saudi Arabia said OPEC was close to agreeing to extend an output production cut beyond June and as Wall Street rallied.
Brent crude futures gained $1.62, or 2.6%, to settle at $63.29 a barrel. U.S. West Texas Intermediate (WTI) crude ended at $53.99 a barrel, up $1.40, or 2.7%.
