The USD strengthens, oil prices weaken, equity markets and US yields are mixed as markets await the key US jobs report. After being hurt by economic weakness, the USD recoups some of its weekly losses, while the CNY sinks to two-year lows versus its peers after the Trump-Xi calls leave issues unresolved. Global equity markets are mixed, with some Asian markets positive, while US futures rose on the easing of the Trump-Musk rift. Meanwhile, European and UK equity markets are down amid increasing trade concerns. "Futures are edging higher, perhaps as Musk has started to suggest on X that he would be open to a cooling off period in his war of words with the President," Said Jim Reid at Deutsche Bank AG. Elsewhere, oil prices weaken, but remain on track for their weekly gain in three weeks. Bitcoin prices strengthened by 1.5% to $103.7k, gold prices firm, while silver prices rose to their highest level since early 2012. In focus today, the US Nonfarm Payroll is likely to show hiring cooled in May to 130k, down from 177k in April. Also in focus, the Canadian Unemployment Rate, US Average Hourly Earnings, and the US Unemployment Rate will help drive currency markets today.
In other news. Musk signals he's open to a cooling-off period in the Trump feud. The Trump-Xi call isn't enough to resolve this summer's looming critical mineral shortage. China's rare earth weapon changes the contours of the trade war battlefield. Trump and Carney in talks on trade ahead of the G7 summit. Canada's oil sands emissions intensity falls for the sixth year. Labour wins pivotal Scottish by-election over SNP and Reform. Russia launches a drone and missile attack on Ukraine. The EU weighs adding Russia to the money laundering 'grey' list. Goldman reins in risk appetite as Trump tariffs roil markets.
In other currencies. The USD remains poised for a weekly loss, hurt by economic weakness and trade limbo. As India bets on growth with the steepest rate cut in five years, INR firms against the USD, with the RBI cutting its key policy rate by 50 bps to 5.5%. CNY down 0.15%, while Asian currencies are flat on average against the USD. Trading currencies come under pressure, with PLN weakening 0.5%, JPY, AUD, SEK, DKK, and ZAR falling 0.3%, CHF, NZD, CZK, & NOK down 0.2%, KWD flat, and MXN up 0.1% against the USD.
In commodity markets. Oil and Soybean prices fell 0.3%. Natural Gas prices rallied 1.5%. Gold prices are up by 0.1%. Silver prices strengthened by 1.2%. Copper prices tumbled by 1.35%, and Wheat prices weakened by 0.6%.
CAD eases off Thursday's eight-month high against the USD as the BoC hold fades, oil prices decrease, and trade uncertainties return to the forefront due to the impact of steel and aluminum tariffs. Domestically, the Canadian trade deficit in April widened to an all-time high of C$ 7.1 bn as US tariffs impacted demand for Canadian goods from the US. Today's focus will be on the Canadian unemployment rate, which is expected to rise to 7%, up from April's 6.9%. The Net change in employment in May is expected to fall by -15k, down from April's +7.4k.
EURCAD continues under pressure following the ECB rate cut, alongside optimism on Trump/Carney trade talks ahead of the G7 meeting later in the month.
EUR slips towards 1.1400 ahead of the US Nonfarm Payroll report. Following the ECB's rate cut, the euro remains under pressure due to the widening interest rate differential against the Fed. The euro is finding some support following ECB President Lagarde's comment, saying the ECB is nearing the end of the easing cycle following its eighth rate cut on Thursday. Domestically, the EU GDP and retail sales beat expectations, supporting the ECB's stall in future rate cuts. Intraday, the US NFP will be the primary driver for the euro; if the NFP print is stronger than 170k or higher, it could revive expectations for a Fed rate hold in July and support the USD.
GBPEUR remains steady as the pound looks ahead to next week's employment report.
GBP slips to 1.3550 as the USD firms heading into the key US jobs report. The pound remains under mild selling pressure, as the USD firms as trades reposition ahead of May's US Nonfarm Payrolls report. Domestically, we expect investors to remain cautious ahead of next week's UK employment report to help guide the BoE's next interest rate decision. Intraday, a weaker NFP print will put pressure on the USD.
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