Forex news for New York trade on November 5, 2021:
- US September non-farm payrolls +531K vs +425K expected
- Canada October employment change 31.2K versus 42K estimate
- BOE's Tenreyro: Pickup in inflation expectations is normal when energy prices rise
- Fed's George: We will be watching inflation expectations and wage inflation
- George: The argument for patience has diminished
- BOEs Ramsden: Inflation expectations and UK have materially increased
- Ramsden: I voted to hike because I see jobs market tightening
- US Sept consumer credit outstanding +29.9B vs +15.9B exp
- Baker Hughes US oil rig count 450 vs 444 prior
- Biden still hasn't made a decision on Fed chair but will soon
- Gold up $24 to $1816
- US 10-year yields down 7.8 bps to 1.446%
- WTI crude oil up $2.72 to $81.53
- S&P 500 up 17 points to 4698 -- 7th consecutive closing record high
- JPY leads, GBP lags
The non-farm payrolls report was solid across the board but not strong enough to shake anyone out of their beliefs. So markets continued to price out rate hikes and squeeze bond shorts. Once again, that led to yen buying in an unwind of some of the recent moves.
USD/JPY tried to rally on the jobs report but quickly reversed and slipped to 113.33 from 114.00 as the day dragged on. It was a similar story in the recent of the yen crosses.
The dollar also made some initial headway against the euro, as EUR/USD fell to the lowest since July 2020 but it couldn't get through 1.1500 and there was a solid bounce up to 1.1567 that started late in European trading.
Cable remained soft but climbed well off the lows in broad USD selling late on falling Treasury yields and positive risk sentiment.
The Canadian jobs headline wasn't great but the details were positive with all the jobs added on the full time side. A turnaround in oil also gave the loonie some life.
The antipodeans bottomed just as New York arrived and made slow, choppy progress from there.
An interesting development was in the gold market as the lower path of rates and falling yields gave a nice lift to precious metals. Gold finished strong and just above the October highs to the best levels since Sept 6.