Forex news for North American trade on May 4, 2018
- April non-farm payrolls +164K vs +190K expected
- CFTC Commitments of Traders: Wrong-footed traders cover dollar shorts
- Fed's Bostic: The Fed should hike rates twice more this year, but maybe more
- Fed's Kaplan: My guess is we will eventually start to see wage pressures
- Dudley: I've said for years that the target is symmetric, that's not a change
- Fed's Williams: Wage growth still on an upward trend
- Fed's Dudley: I would be surprised if expansion were to end in next year or two
- New York Fed Q2 GDP Nowcast 3.0% vs 3.2% prior
- Canada April Ivey PMI 71.5 vs 59.8 prior
- Argentina central bank: You call that a hike, this is a hike
- CFTC Commitments of Traders: Wrong-footed traders cover dollar shorts
Markets:
- Gold up $3 to $1315
- US 10-year yields flat at 2.95%
- S&P 500 up 34 points to 2663
- WTU crude up $1.37 to $74.96
- JPY leads, NZD lags
Non-farm payrolls threw a bit of a curveball at the market on Friday. The focus has been on wages for the past year and today's report had soft wage data and the initial move was naturally lower in the US dollar. USD/JPY hit 108.64 from 108.90 and it was about the same across the FX board.
From there, the dollar rebounded. This was in part due to a second look, especially at unemployment, which fell to 3.9% from 4.1%. The thinking is that the Fed can't ignore unemployment that low and will have to hike at least twice more this year.
In turn, Treasury yields kicked back up and the dollar did as well. A trickly became a flood and EUR/USD dropped down to 1.1911 from a post NFP high 1.1994. Cable took out the 200-dma at the same time and plunged down to 1.3487.
But late in the day there was some profit-taking on a fantastic week for euro and sterling shorts. EUR/USD rebounded to 1.1962 and cable finished right at the 200-dma at 1.3533.
USD/CAD slumped late as a huge bid hit crude and sent WTI to $69.97 -- the most since 2014. Crude didn't back off and USD/CAD finished at 1.2849 from a high of 1.2918 -- which was above the weekly high.
The stock market was also a factor as a Buffett/Apple-inspired bid sent shares soaring after an early drop. Support at the 200-day moving average inspired buyers and it was a race higher from there with USD/JPY rebounding to 109.06 from a low of 108.65.
Have a great weekend.
