The strongest to weakest of the major currencies

The AUD is the strongest and the CHF is the weakest as the North American session begins. The USD is mostly lower but modestly lower with the exception of a rise vs the CHF. The greenback is little changed vs the EUR and the JPY ahead of the US jobs report which will be released at 8:30 AM.

The U.S. jobs report is set to impact markets on Friday (at 8:30 AM ET), with investors also monitoring Apple's Q1 earnings and concerns around regional banks. The monthly nonfarm payrolls report is expected to show the slowest job growth since 2020, with 180,000 jobs added in April, compared to 236,000 in March. The U.S. unemployment rate is projected to rise to 3.6%. These numbers will provide insight into the labor market's cooling trend, following aggressive Federal Reserve interest rate hikes. Canada will also release their employment statistics (at 8:30 AM ET).

Below are the details of the expectations for each country:

  • Canada:
    • Employment Change: 21.6K (previous: 34.7K)
    • Unemployment Rate: 5.1% (previous: 5.0%)
  • U.S.:
    • Average Hourly Earnings m/m: 0.3% (previous: 0.3%). YoY 4.2% versus 4.2% last month
    • Non-Farm Employment Change: 180K (previous: 236K)
    • Unemployment Rate: 3.6% (previous: 3.5%)
    • Average work week 34.4 hours versus 34.4 hours last month
    • Participation rate came in that 6th 2.6%
    • Manufacturing payrolls minus 5K versus minus 1K last month

Investors are also watching the banking sector, with regional banks experiencing significant stock drops. PacWest's shares plummeted over 50% as it explores strategic options, including a potential sale. First Horizon and TD Bank canceled a planned merger due to regulatory approval uncertainties, causing First Horizon's stock to lose a third of its value. Western Alliance's shares slumped 38%, despite an increase in deposits since March. The S&P Regional Banking index (KRE) dipped by 5.45% yesterday and has declined 38% in 2023. The good news there is a modest decline in pre-market trading (but we are heading into a weekend) with the KRE index trading at $37.08 up from $36.08 at the close yesterday (up 2.77%). PacWest (down -50.62% yesterday) is trading at $3.78 after closing at $3.17 (up 19.24%). Western Alliance, whose stock fell -38.45% yesterday is trading up 13.08% today at $20.58. First Horizon is trading up 3.28%.

During the European session, several key economic data points were released. Switzerland's unemployment rate remained steady at 1.9%, but Swiss CPI remained flat at 0.0%, lower than the the 0.2% expectation. That helped to weaken the CHF today. German factory orders experienced a significant decline of 10.7% month-on-month, contrasting sharply with the 4.5% growth in the previous period and greatly exceeding the forecasted 2.4% drop. SNB's Jordan spoke but added that SNB cannot exclude further tightenings as underlying inflation is still very strong

French industrial production fell by 1.1% month-on-month, surpassing the 0.5% decline forecast but falling short of the previous 1.4% growth. French preliminary private payrolls remained stable at a 0.2% quarterly growth rate.

The UK's construction PMI rose to 51.1, exceeding the forecast of 50.9 and showing an improvement from the previous 50.7 figure. Finally, Eurozone retail sales declined by 1.2% month-on-month, which was worse than the forecasted 0.2% decline and the previous month of -0.2%.

US stocks are trading higher held by Apple. US yields are also higher in trading today. Crude oil is also rebounding (above $70) after trading as low as $63.64 yesterday.

Looking around the markets, the morning snapshot shows

  • spot gold is trading down $-14 or -0.69% at $20,035.93
  • spot silver is down $0.17 or -0.67% at $25.83
  • WTI crude oil is up $2 at $70.57
  • Bitcoin is also modestly higher $29,132

In the premarket for US stocks, the major indices looking to break a 4 day slide to start the month of May:

  • Dow industrial average is up 168 points after falling -286.50 point yesterday
  • S&P index is up 27.75 points after yesterday's -29.51 point decline
  • NASDAQ index is up 84 points after yesterday's -58.93 point decline

Apple shares are trading at $169.94 up $4.18 or 2.52%. Other companies that announced yesterday:

  • Dropbox's up 8.5%
  • Expedia up 5.7%
  • LYFT down 15.34%
  • Coinbase up 9.14%
  • Doordash up 4.47%
  • Draft Kings up 11.97%

In the European equity markets, the major indices are also rebounding:

  • German DAX +0.82%
  • Frances CAC +0.58%
  • UK's FTSE 100 +0.5%
  • Spain's Ibex +0.49%
  • Italy's FTSE MIB +1.6%

In the US debt market, yields are rebounding after declines this week:

  • 2 year yield 3.831% +10.4 basis points. The high yield this week reached 4.16%
  • 5 year yield 3.357% +8.0 basis points. It's highly yield to reach 3.657% this week
  • 10 year yield 3.408% +5.5 basis points. It's high yield reached 3.608% this week
  • 30 year yield 3.756% +3.4 basis points. It's high yield reached 3.585% this week

In the European debt market, the benchmark 10 year yields are also higher:

European benchmark 10 year yields