The USD is steady, oil prices are firm, equity markets are up, and US yields are mixed heading into the US Jobs data. Currency markets remain under pressure versus the USD, equity markets rebound and treasuries fluctuated before the US employment data which will be scrutinized for clues on the direction for Feds interest rates. Markets expect slower, but still strong US employment growth expected in July with Nonfarm payrolls increasing by 200k, the unemployment rate unchanged at 3.%, and hourly earnings forecast to rise 0.3%; up 4.2% y/y. Amazon Inc jumped 9% in US premarket trading following robust results, while Apple Inc.'s market value looks set to dip below $3 trillion level after iPhone posted a third straight quarterly decline. In focus today, outside of US jobs data, CAD employment data, CAD Ivey PMI, & BoE's Pill speech will help drive intraday direction to currency markets.
In other news. The Saudi-hosted conference seeks to build support for a Ukrainian peace plan. Two US sailors were charged with passing military secrets to China. The White House urged to limit US investments in China stocks and bonds. Russian warship damaged after Ukraine attacks Novorossiysk naval base. Floods hit China's grain belt as storms following Doksuri head northwest. German manufacturing is 'suffering' despite the boost from big-ticket orders. Canada sticks with the immigration target despite the housing crunch.
In currency news. The USD pauses its rally ahead of the release of US jobs data. CNY continues to weaken as confidence in its economy spreads. AUD & NZD head for their third week of declines as the Chinese economy remains under pressure. Indian Rupee drops alongside most of its Asian peers vs USD heading into the US jobs data. CNY falls 0.25%, while Asian currencies are down 0.15% on average vs USD. Trading currencies are mixed with CHF falling 0.4%, JPY down 0.15%, while ZAR, MXN & NZD are flat, AUD & NOK firm 0.1%, and SEK gains 0.2% vs USD.
Oil prices gain for a sixth weekly gain on more supply cuts by Saudi Arabia and Russia, with both pledging to continue to cut output through September. CAD holds near 4-week lows despite stronger oil and copper prices, and looks vulnerable to further weakness after it breached the key 1.3333 (75 cents) level. Today sees the week's key data releases for both Canada and US employment reports. In Canada, we expect the unemployment rate to rise to 5.5% and the net change in employment to weaken to 21.1k vs 59.9k in June. The Ivey Purchasing Managers Index, an important indicator of business conditions and the overall economic condition in Canada is expected to rise positively from 50.2 to 52.7 in July. The US & CAD jobs data and CAD PMI releases will be a primary driver to the loonie's intraday direction.
EURCAD holds steady, sidelined heading into the CAD & US employment data.
Euro steadies near 1.0950 after lackluster Eurozone retail sales, heading into the US NFP data. Euro bounced off its August lows as currency markets consolidate heading into the US Nonfarm Payroll data. Domestically Eurozone Retail sales m/m slipped to -0.3% vs expectations of +0.2%, while industrial output in Italy & Germany improved m/m, while French Industrial output fell below expectations. The Euro is sidelined heading into the key US NFP data which is expected to give insight into the Federal Reserve's interest rate direct.
GBPEUR stalls after the BoE hiked interest rates on Thursday and investors remain sidelined ahead of the US NFP data.
GBP stalls at 1.2700 vs USD with the US Jobs data in focus. The pound bounces off August lows below 1.2650, as markets consolidate heading into the US jobs data. On Thursday the BoE hiked 25bps to 5.25%, and the BoE lowered its inflation forecast which has put renewed selling pressure on the pound. BoE Governor Bailey said that they have a presumed path for interest rates from where they currently stand. Markets have turned bearish on the pound's longer-term direction, a break below 1.2590 (June lows) opens up the potential for a retest of 1.2320 last seen in May. Today's focus will be on BoE Pill's speech and US NFP for intraday direction.
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