Forex news for North American trade on April 6, 2018:
- March non-farm payrolls +103K vs +185K expected
- Canada net employment change 32.3k vs 20k exp
- Fed's Powell: Moderate wage gains show job market not excessively tight
- Powell Q&A: Says he feels good about strength of financial system
- Fed's Williams: Sees inflation exceeding 2% for next few years
- CFTC commitment of traders: Net speculative positions see mixed, but small changes
- US February consumer credit +$10.60B vs +$15.5B expected
- Kudlow solution to China dispute possible within 3 months. Tariffs not a bluff
- Treasury Sec Mnuchin: "There is the potential for a trade war"
- Baker Hughes US oil rig count 808 vs 797 prior
- BOE's Carney: We need to consider financial impacts of weather-related events
- Kudlow: I just found out about new China tariffs last night
- Canada March Ivey PMI 59.8 vs 59.6 prior
Markets:
- CAD leads, JPY lags
- Gold up $7 to $1330
- S&P 500 down 58 points to 2604
- US 10-year yields down 6 bps to 2.77%
- WTI crude down $1.68 to $61.88
The market had taken a constructive view of the latest Trump tariff threats early in New York trade but it soured as the day continued.
Non-farm payrolls wasn't a big market mover. Wages were in-line with estimates and there was some minor USD selling because of the soft headline on jobs but it was erased quickly.
The Canadian dollar move was bigger as a strong full-time number raised the risks of a BOC hike in April or June. USD/CAD dropped down to 1.2730 from 1.2780 but retraced most of the move by the end of the day because of deteriorating sentiment.
The broader reaction was a 'trade war on' move that's increasingly familiar. It results in yen strength with the commodity currencies and euro struggling. One of the headlines that hurt was Larry Kudlow revealing that he didn't know about the tariffs until they were announced. That argues that Trump is making it up as he goes along.
There was also a big round of buying in the pound ahead of the London fix. Cable stormed to 1.4100 from 1.4000 and then flattened out afterwards.
The S&P 500 was beaten up in a fall that exceeded 70 points at the lows. The index briefly pierced the 200-day moving average but rebounded to close 11 points above it.
Have a great weekend.
