USD, CAD, JPY, EUR flows: USD slightly weaker except against CAD after employment data
Weak Canadina data hits CAD, US data modestly strong but USD weaker elsewhere
The USD is generally a little weaker after the US employment report, except against the CAD, which has surfed across the board after the Canadian employment report showed a 17.7k dop in employment in April. The US data was stronger than expected in April, with the 115k rise in April beating the consensus of 65k, with net revisions only slightly negative. However, average earnings growth was weaker than expected at 0.2% m/m, 3.6% y/y, and the unemployment rate was steady at 4.3% as expected, so the net impression was of a fairly steady and solid labour market.
USD/CAD has risen 30 pips initially to 1.3690, while the USD is generally slightly weaker elsewhere. Yield spreads suggests scope for USD/CAD to move somewhat higher still, while we would expect little net USD impact elsewhere. There is likely to be some reluctance to position heavily ahead of the weekend given the risks around the US/Iran situation, but given the risk positive bias to trade this week, there should be some optionality in holding more risk negative positions. Long USD/CAD or short CAD/JPY look to satisfy that criterion.
