Market Roundup
• US Apr Non-Farm Payrolls, 164k, 192k forecast, 103k previous.
• US Apr Private Payrolls, 168k, 194k forecast, 102k previous.
• US Apr Manufacturing Payrolls, 24k, 20k forecast, 22k previous.
• US Apr Unemployment Payrolls, 3.9%, 4.0% forecast, 4.1% previous.
• US Apr Government Payrolls, -4k, 1k previous.
• US Apr Average Earnings MM, 0.1%, 0.2% forecast, 0.3% previous.
• US Apr Average Earnings YY, 2.6%, 2.7% forecast, 2.7% previous.
• US Apr Average Workweek Hrs, 34.5, 34.5 forecast, 34.5 previous.
• US Apr Labor Force Partic, 62.8%, 62.9% previous.
• CA Apr Ivey PMI, 70.4, 64.7 previous.
• CA Apr Ivey PMI SA, 71.5, 59.8 previous.
• Trump team demands China slash U.S. trade surplus by $200 bln, cut tariffs.
• Trump says date, place set for North Korea summit.
• Fed's Bostic says he's open to four rate hikes, or two.
• Fed's Williams: I don't see any rapid increase in inflation coming.
• Argentina cenbank revives peso currency with mega rate hike.
Looking Ahead - Economic Data (GMT)
• 7 May 00:30 Australia Apr AIG Construction Index, 57.2 previous
• 7 May 02:30 Australia Apr NAB Business Conditions, 14 previous
• 7 May 02:30 Australia Apr NAB Business Confidence, 7 previous
• 7 May 02:30 Australia ANZ Internet & NewsPaper Job, 0.0% previous
• 7 May N/A China Apr FX Reserves (Monthly), 3.133 tln forecast, 3.143 tln previous
Looking Ahead - Events, Other Releases (GMT)
• 6 May 23:00 Fed Reserve Vice Chairman for Supervision Randal Quarles speaks in Florida, USA
• 6 May 23:50 Bank of Japan releases minutes of Monetary Policy Meeting held on Mar 8 and 9 in Tokyo
• 7 May 09:30 Riksbank First Deputy Governor Kerstin af Jochnick will participate in SEB's lunch meeting in Vanberg, Sweden
• 7 May 12:25 Federal Reserve Bank of Atlanta President Raphael Bostic speaks in Florida, USA
• 7 May 18:00 Federal Reserve Bank of Philadelphia President Patrick Harker participates in a discussion in Florida, USA
• 7 May 18:00 Federal Reserve Bank of Richmond President Tom Barkin speaks in Fairfax
• 7 May 19:00 Bank of Canada Deputy Governor Timothy Lane participates in a discussion in Carcais, Portugal
• 7 May 19:30 Federal Reserve Bank of Dallas President Robert Kaplan and Federal Reserve Bank of Chicago President Charles Evans participate in a discussion in Florida, USA
Currency Summaries
EUR/USD is likely to find support at 1.1887 levels and currently trading at 1.1961 levels. The pair has made session high at 1.2009 and hit lows at 1.1909 levels. Euro declined against the dollar on Friday as dollar gained despite disappointing U.S. employment data for April. The U.S. economy added fewer jobs than expected and the unemployment rate dropped to near a 17-1/2-year low of 3.9 percent as some jobless Americans left the labor force. The Labor Department's closely watched employment report on Friday also showed wages barely rose last month, which may ease concerns that inflation pressures are rapidly building up, likely keeping the Federal Reserve on a gradual path of monetary policy tightening. Nonfarm payrolls increased by 164,000 jobs last month, the Labor Department reported. Data for March was revised to show the economy adding 135,000 jobs instead of the previously reported 103,000.The dollar index reached a 2018 high of 92.834 on Wednesday as investors bet that the Federal Reserve will continue raising rates while other central banks including the European Central Bank (ECB) will act more slowly. San Francisco Fed President John Williams said on Friday that he does not see any abrupt rise in inflation happening even as price gains have risen towards the central bank's target.
GBP/USD is supported in the range of 1.3477 levels and currently trading at 1.3531 levels. It reached session high at 1.3567 and dropped to session low at 1.3484 levels. Sterling slipped lower against dollar on Friday, erasing all its gains for 2018 after investors shrugged off disappointing jobs data out of the United States to buy into the greenback. The dollar index backed off its highs, but it still remained in positive territory against a currency basket. Investors earlier bet that the Federal Reserve will continue raising rates while other central banks will act more slowly. The pound, until recently one of the best performing major currencies, slid as much as half a percent to a four-month low of $1.3487, leaving the British currency nine cents below where it stood in mid-April. Sterling has slumped more than six percent in a fortnight, hit by a rapid reversal in predictions of an interest rate hike from the Bank of England next week, a run of worse-than-expected economic data and an investor rush to buy dollars. The pound has also fallen below its 200-day moving average, a key technical level, for the first time since April 2017. Against a euro pulled lower by dollar buying, sterling traded up 0.1 percent to 88.27 pence. The U.S. employment data showed U.S. job growth increased less than expected in April and the unemployment rate dropped to near a 17-1/2 year low of 3.9 percent.
USD/CAD is likely to find support at 1.2800 levels and is trading at1.2845 levels. It has made intraday high at 1.2917 and lows at 1.2836 levels. The Canadian dollar weakened to a one-month low against a broadly firmer greenback on Friday, but the sell-off lost momentum as oil prices climbed and domestic data pointed to a strengthening of economic activity. The U.S. dollar climbed against a basket of major currencies after briefly dropping on disappointing U.S. employment data for April. The price of oil, one of Canada's major exports, rose to its highest in more than three years as global supplies remained tight and the market awaited news from Washington on possible new U.S. sanctions against Iran. The pace of purchasing activity in Canada accelerated in April as prices climbed, according to Ivey Purchasing Managers Index data. The seasonally adjusted index jumped to 71.5 from 59.8 in March. A reading above 50 indicates an increase in the pace of activity. The unadjusted index climbed to 70.4 from 64.7.The seasonally adjusted gauge of prices paid rose to 67.8 from 60.0.The Canadian dollar was trading 0.1 percent lower at C$1.2845 to the greenback. The currency touched its weakest since April 3 at C$1.2918. For the week it declined 0.3 percent.
AUD/USD is supported around 0.7469 levels and currently trading at 0.7531 levels. It hit session high at 0.7554 and made session lows at 0.7490 levels. The Australian dollar edged slightly higher against its U.S. counterpart on Friday as speculators took profits on long U.S. dollar positions. The Aussie dollar edged up to $0.7538, after bouncing 0.5 percent overnight, taking it away from an 11-month trough around $0.7472 struck earlier in the week. The Aussie dollar was steamrolled by its U.S. counterpart in recent weeks as the relative outperformance of the U.S. economy argued for more hikes in interest rates there and pushed up Treasury yields. The Reserve Bank of Australia (RBA) reiterated the steady message in its quarterly economic outlook on Friday, saying that while a hike might be appropriate at some point here was no near-term case for a move. RBA had expected the first hike to come in November, but earlier this week pushed the timing out to February next year. The greenback consolidated against a basket of its rivals, rounding off a third week of solid gains as widening interest rate differentials supported the greenback. The dollar index, a gauge measures the unit's strength against six other major currencies stood at 92.56. It hit a 2018 high of 92.83 on Wednesday and has gained around 4 percent in the last two weeks.
Equities Recap
European shares bounced back on Friday as good company results rolled in, but bank stocks were left behind after poor updates from HSBC, BNP Paribas and Societe General.
UK's benchmark FTSE 100 closed down by 0.9 percent, the pan-European FTSEurofirst 300 ended the day up by 0.62 percent, Germany's Dax ended up by 1 percent, France’s CAC finished the day up by 0.2 percent.
The three major U.S. stock indexes rose more than 1 percent on Friday after weaker-than-expected U.S. wage growth helped to calm investor fears about rising interest rates and inflation, though the S&P 500 and Dow Industrials still posted losses for the week.
Dow Jones closed up by 1.40 percent, S&P 500 ended down by 1.29 percent, Nasdaq finished the day up by 1.72 percent.
Treasuries Recap
U.S. Treasury yields were little changed on Friday after dropping to multiweek lows, supported by U.S. equity gains as investors believed a weaker-than-expected jobs report will not deter the Federal Reserve from raising interest rates at the June meeting.
In late afternoon trading, U.S. benchmark 10-year yields were flat at 2.945 percent from 2.946 percent late on Thursday.
U.S. 30-year bonds, meanwhile, fell to 3.114 percent, from Thursday's 3.121 percent.U.S. two-year yields though were up at 2.500 percent, from 2.484 percent on Thursday.
Commodities Recap
Gold prices rose slightly on Friday as the U.S. dollar backed off its highs, initially rising after U.S. jobs data was weaker than expected. However the data was still strong enough to support the case for more interest rate increases.
Spot gold rose 0.2 percent to $1,314.23 per ounce by 3:09 p.m. EDT (1909 GMT), heading for a third consecutive weekly decline, while U.S. gold futures for June delivery settled up $2, or 0.2 percent, at $1,314.70.
Oil prices rose about 2 percent on Friday, with U.S. crude hitting its highest in more than three years, as global supplies remained tight and the market awaited news from Washington on possible new U.S. sanctions against Iran.
U.S. light crude settled up $1.29 at $69.72 a barrel. It touched a session peak of $69.97 for the first time since November 2014. It was on track to gain just over 2.3 percent on the week.
Brent crude oil settled up $1.25 at $74.87 a barrel. The global benchmark was set to end the week up 0.3 percent.
