NY Open: Over-hyped NFP fails to deliver
FX Trader, Loonieviews.net
The US nonfarm payrolls report underwhelmed. The expected forecast-beating result was somewhat disappointing. (Actual NFP 157,000 versus a forecasted 190,00). Fortunately, unemployment dipped to 3.9%, matching predictions and providing damage controlfor the headline number.
The US trade deficit widened, and according to the Wall Street Journal, it did so at the fastest pace since November 2016. If anything, the news will irritate President Trump. China will annoy the President further as well, as Beijing is planning to slap tariffs of between 5% and 25% on a range of US imports.
FX markets reacted predictably to the US data. EURUSD popped to 1.1609 from 1.1570, GBPUSD jumped from 1.3002 to 1.3042 and USDJPY dropped to 111.38 from 111.60. The US dollar has recovered somewhat against the European currencies, but not against the yen.
The Canadian dollar got a double dose of good news. Canada’s trade deficit narrowed to a mere $0.63 billion, well below the forecast of a $2.3 billion deficit. The icing on the cake was the 4.1% increase in exports to $50.7bn, a record high, and the first time they have been above the $50bn mark. USDCAD was unable to break outside this week's 1.2975-1.3050 range.
Wall Street futures indicate a flat opening this morning.
The US dollar managed to rally against all the G-10 majors since last Friday’s New York close. The only exception was the Canadian dollar which managed a 0.55% gain (as of 13:00 GMT) The Swiss franc was unchanged. The week ahead will be lacking in some of the drama and excitement seen in this week; there are only two central bank meetings, the Reserve Bank of Australia and the Reserve Bank of New Zealand. Neither bank is expected to deviate from their dovish interest rate policies. China trade data will be a key focus, at least for the Antipodean currencies. Canada is closed on Monday.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.