Market Roundup
• US March NFP undershoot at 98k vs forecast 180k; previous revised down to 219k from 235k.
• US unemployment rate falls to 4.5% from 4.7%; U6 underemployment 8.9% v 9.2% previous.
• US Avg workweek steady at 34.3 hours, avg earnings 0.2% v 0.3% previous.
• Fed’s Dudley: Fed might avoid simultaneous rate hike, bond runoff; Yields rise.
• Fed’s Dudley: One reason to shed bonds is to leave option to expand balance sheet in future.
• China's Xi urges trade cooperation in first meeting w Trump; Trump says relationship w Xi outstanding.
• German output surges as industry enjoys "extraordinary" start to year, Industry o/p +2.2 percent m/m in Jan/ Feb.
• More signs of UK slowdown appear as Brexit gets under way, UK industrial o/p shrinks unexpectedly.
• U.S. Senate set to approve Trump's conservative Supreme Court pick.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Current Account NSA JPY* Feb forecast 2615.6b, 65.5b-previous
• 05:00 Japan Economy Watchers Poll SA* Mar 14:24- previous
• 01:30 Australia Housing Finance* Feb 0.50%- previous
• 01:30 Australia Invest Housing Finance* Feb 4.20%- previous
Looking Ahead - Events, Other Releases (GMT)
• --:-- Japan Bank of Japan Governor Haruhiko Kuroda will hold quarterly meeting of regional branch managers.
• 01:30 US FRB St. Louis President & CEO James Bullard will speak at Monash University in Melbourne
Currency Summaries
EUR/USD is likely to find support at 1.0480 levels and currently trading at 1.0533 levels. The pair has made session high at 1.0577 and hit lows at 1.0512 levels. The dollar initially declined against euro in early US session after a much softer-than-forecast U.S. non-farm payrolls report, but recovered ground after an influential Federal Reserve official said the U.S. central bank's plan to shrink its bond portfolio this year would not significantly delay its interest rate-hiking cycle. New York Fed President William Dudley, an advocate of low-interest rates, said on Friday that shrinking the Fed's $4.5 trillion bond portfolio would prompt only a "little pause" in the Fed's rate hike plans, providing relief to dollar bulls banking on more than one rate increase this year. U.S. job growth slowed sharply in March amid continued layoffs in the embattled retail sector, but a drop in the unemployment rate to a near 10-year low of 4.5 percent suggested labor market strength remained intact. Nonfarm payrolls increased by 98,000 jobs last month, the fewest since last May, the Labor Department said on Friday. The dollar index rose to three-week peaks of 101.26 and last traded up 0.5 percent at 101.16.The greenback hit a four-week high versus the euro, which fell 0.5 percent to $1.0587.
GBP/USD is supported in the range of 1.2377 levels and currently trading at 1.2484 levels. It reached session high at 1.2511 and dropped to session low at 1.2403 levels. Sterling declined against dollar on Friday as sterling came under strong selling pressure after data showed an unexpected slide in British industrial output, clouding the outlook for the UK's economy as it prepares to leave the European Union. In the first full trading week since Britain triggered Article 50, the pound sank against the dollar and the euro. Sterling has been propped up in recent weeks by expectations that the Bank of England might consider a rate rise to rein in inflation but comments by policymakers this week , in particular, Gertjan Vlieghe have played down that prospect. Data on Friday showed industrial output fell 0.7 percent in February, worse than all forecasts of economists that pointed to a 0.2 percent increase following a 0.3 percent decline in January. The pound slipped to a one-week low in the wake of the data, falling further in the late US session after a key Federal Reserve official shed more light on the Fed's plan to reduce its balance sheet. It was last down 0.6 percent on the day at $1.2370.
USD/CAD is supported at 1.3457 levels and is trading at 1.3490levels. It has made session high at 1.3513 and lows at 1.3460 levels. The Canadian dollar gave up its earlier gain against the dollar on Friday as dollar pared most of its earlier losses. Canadian dollar initially in US session strengthened to a four-day high against its U.S. counterpart, boosted by stronger-than-anticipated domestic employment data and weaker U.S. job data, but reversed course after a top Federal Reserve official boosted expectations for interest rate increases. Canada added 19,400 jobs in March, most of them full-time, Statistics Canada data showed. Analysts had forecast 5,000 new positions. March marked the fourth month in a row that Canada has added jobs, the latest sign the economy is recovering from a prolonged slump caused by low oil prices. Oil traded near a one-month high on Friday after the U.S. missile strike on a Syrian air base while the dollar rose as investors dismissed a weak U.S. jobs report as not enough to derail a strong economy or outlook for rising interest rates.
AUD/USD is supported around 0.7262 levels and currently trading at 0.7297 levels. It hit session high at 0.7333 and made session lows at 0.7264 levels. The Australian dollar declined against US dollar on Friday as investors fled risk after the United States fired a barrage of missiles against a Syrian air base controlled by President Bashar al-Assad's forces. The missile strikes, launched in retaliation for a deadly chemical attack in a rebel-held area, raises the risk of confrontation with Russia and Iran, Assad's two main military backers. The Australian dollar dropped to 0.7492, its lowest since early March on concerns about a potential escalation in the Syrian conflict following the U.S. attack. U.S. job growth slowed sharply in March amid continued layoffs in the retail sector. But a drop in the unemployment rate to a near 10-year low of 4.5 percent suggested the labor market was still tightening. U.S. Labor Department said nonfarm payrolls increased by 98,000 jobs in March, the fewest since last May and far below economists' expectations for 180,000.
Equities Recap
European shares inched up on Friday, reversing earlier weakness as oil stocks climbed after a U.S. cruise missile strike in Syria sent crude prices near to one-month highs.
The UK's benchmark FTSE 100 closed up by 0.6 percent, FTSEurofirst 300 ended the day up by 0.11 percent, Germany's Dax ended up 0.1, and France’s CAC finished the day up by 0.15 percent.
Wall Street's three major indexes edged lower on Friday to end well below session highs after a weaker-than-expected job report, a U.S. missile strike in Syria and comments by a key Federal Reserve official on the Fed's plan to reduce its balance sheet.
Dow Jones closed down by 0.03 percent, S&P 500 ended down 0.07 percent, Nasdaq finished the day down by 0.02 percent.
Treasuries Recap
U.S. Treasury yields rose on Friday, reversing a plunge sparked by weaker-than-expected U.S. jobs growth data, after a top Federal Reserve official boosted expectations for interest rate increases.
U.S. 30-year yields hit a session high of 3.009 percent after hitting 2.939 percent, their lowest since mid-January, while five-year yields touched 1.921 percent after touching 1.784 percent, their lowest since Nov. 30, 2016.
Commodities Recap
Oil prices rose on Friday, trading near a one-month high and closing the week up 3 percent after the United States fired missiles at a Syrian government air base, raising concern that the conflict could spread in the oil-rich region.
Brent crude futures settled up 35 cents at $55.24. Brent reached a session high of $56.08, the highest since March 7, shortly after the U.S. missile strike was announced. For the week, Brent was up 4.4 percent.
U.S. West Texas Intermediate (WTI) crude futures were up 54 cents at $52.24 a barrel, off the session high of $52.94.
Gold hit a five-month high on Friday after U.S. jobs data dampened expectations that the U.S. Federal Reserve will raise interest rates, but the metal gave up most gains as the dollar rose and safe haven demand ebbed.
Spot gold rose 0.2 percent to $1,253.71 an ounce by 2:44 p.m. EDT (1844 GMT )after touching its highest since Nov. 10 at $1,270.46, putting it on track for a fourth consecutive week of gains. U.S. gold futures climbed 0.3 percent to settle at $1,257.30 an ounce.
