North American Summary and Highlights 8 May
Overview - The USD was weaker in Europe and did not pick up after a stronger than expected US non-farm payroll.
North American session
US non-farm payrolls were stronger than expected with a rise of 115k in April, but unemployment was unchanged at 4.3%, and higher before rounding, with average hourly earnings softer than expected at 0.2%. The USD softened marginally on the release but was not much changed in the session, USD/JPY near 156.70 and EUR/USD rising modestly to 1.1780. EUR/GBP stabilized near .8645 but EUR/JPY extended gains to 184.60.
The Canadian employment report was weak with employment falling by 17.7k in April and unemployment up to 6.9% from 6.7%. USD/CAD bounced above 1.37 from 1.36 before correcting to 1.3680. AUD/USD in contrast kept close to 0.7240.
European session
The USD was generally weaker through the European morning, with EUR/USD gaining around 30 pips to 1.1770, and most other European currencies seeing similar gains. The JPY underperformed, with EUR/JPY gaining 30 pips to 184.40. The scandis were the best performers, with EUR/NOK dropping 7 figures to 10.85, erasing the losses seen in the European afternoon yesterday, and EUR/SEK was also softer, dropping 4 figures to 10.84. NOK gains came despite Norges Bank governor Ida Wolden Bache saying that Norges Bank didn’t anticipate a big increase in interest rates, after Thursday’s policy rate hike to 4.25%.
EUR/GBP traded slightly softer with the markets apparently seeing the UK local election results as marginally less bad for the ruling Labour party than expected, despite the loss of hundreds of council seats. UK gilt yields also edged slightly lower. Datawise, German industrial production data was weaker than expected in March, falling 0.7%.